Shares of Sun Pharmaceutical Industries on Thursday regained ₹1,000-mark for the first time since May 2015, ahead of its quarterly numbers. The pharma major is scheduled to announce its September quarter results on November 1. The stock, on Thursday, closed at ₹1,011.30 on the BSE.
Fund flows
According to analysts, beaten-down pharma and IT stocks have witnessed funds flow in recent times especially the market leaders in those segments. Sun Pharma, being the market leader in the category, attracted buying, they said. Besides, weakening rupee against dollar will boost Sun Pharma bottomline, they added.
Based on September 2022 Indian Pharmaceutical Market data, Sun Pharma retained its top spot having 7.7 per cent market share, said JM Financial.
Better Q2
Pharmaceutical companies are likely to witness a decent quarter amid strong year-on-year growth in domestic formulations and a stable US portfolio amid favourable currency movement and some key launches, said ICICI Securities in its result preview.
Global brokerage BNP Paribas believes Sun Pharma should benefit from operating leverage, with continued scale-up of the specialty business. “We expect US business to grow in low single-digit q-o-q led by ramp-up of Winlevi and Pentasa ER. Domestic formulation to grow in high single-digit y-o-y. EBITDA margin to sustain above 25 per cent with ramp-up of specialty revenue in the US,” BNP Paribas, which retained Buy rating with a revised price target of ₹1,114 (₹1,074), said.
Domestic brokerage Prabhudas Lilladher recommends a Buy on Sun Pharma with a target price of ₹1,070. “We expect profitability to improve henceforth with steady domestic business, strong launches in the US market and continued cost optimisation. We prefer companies with steady domestic franchises and strong US visibility. Accordingly, our top picks remain Sun Pharma, Cipla, JB Chemicals & Pharma and TRP.”