We had recommended
Sun Pharmaceutical Industries in volume 32, issue no. 8 dated March 20 - April 18, 2017, under the ‘Analysis ’ section when the scrip was trading at ₹ 708.25. Our recommendation was based on the company’s strong revenue synergies, increased expenditure on R&D, prospects through significant acquisitions and strong financial performance.
Sun Pharmaceutical Industries offers products to therapy areas such as cardiology, neuro-psychiatry, gastroenterology, anti-infective, diabetology and dermatology. The company has strong presence in the US business, Indian branded generics business, emerging markets, global consumer healthcare business and active
pharmaceutical ingredients (APIS).
On the financial front, Sun Pharmaceutical Industries posted 0.27 per cent drop in its revenue to ₹1,733.97 crore in Q1FY18 on a yearly basis . However, the company’s EBITDA loss increased to ₹172.81 crore in Q1FY18. The net loss of the company also shot up massively to ₹1,290.99 crore in Q1FY18, as against ₹151.46 crore in the first quarter of FY17. On an annual basis, the company’s revenue increased 3.72 per cent to ₹7,523.79 crore in FY17. The company’s PBIDT stood at ₹95.27 crore in FY17, higher by 122.76 per cent, as against an EBITDA loss of ₹418 crore in FY16. The company’s net loss got massively reduced to ₹34.95 crore in FY17, as against a loss of ₹1,087 crore in the previous fiscal.
After our recommendation, the share price of Sun Pharmaceutical Industries dropped by about 23.58 per cent. However, the stock has exhibited a revival trend and has good growth prospects, especially in terms of USFDA approvals. Hence, we recommend investors to Hold the stock. (Closing price as on Nov 8, 2017)