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HDFC Securities
Sun Pharma Ind
(Exit around ₹655, re-enter at ₹573-587)
₹CMP: 623.30
Led by a strong all-round show, India’s largest drug-maker, Sun Pharmaceutical Industries Ltd (SPIL), beat the street estimates once again. The December quarter was a good one on several fronts. Sun Pharmaceutical’s formulations business did very well with sales at home rising by 20 per cent despite the market getting hit with the new drug pricing policy. Though its net profit growth at 74 per cent seems very impressive, that is also due to higher other income and a lower income-tax incidence. SPIL in Q3FY14 got approval for generics of the blockbuster brand Cymbalta (anti-depressant drug). This is likely to drive revenue. With a strong pipeline of products for the US market, good domestic growth led by speciality segments, which face lower pricing competition, as well as good rest of the world sales, the growth momentum is likely to be sustained.
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