Most Brokerages Remain Bullish On Sun Pharma After Q1 Results
Here are what brokerages have to say about Sun Pharma’s first-quarter performance…
Most analysts maintained their bullish rating on Sun Pharmaceutical Industries Ltd. after profit of India’s largest drugmaker beat estimates in the quarter ended June.
The company’s net profit rose 31.20 percent year-on-year to Rs 1,388 crore in the April-June period, as growth in India offset the subdued performance in the U.S. and other emerging markets. Lower R&D costs and tax rates, too, helped.
Sun Pharma’s robust Q1 results comes at a time India’s pharma industry grew at its slowest pace in five years in the April-June period due to fall in volumes even as prices remained stable.
The drugmaker also maintained its low- to mid-double-digit sales guidance for the ongoing financial year.
A look at what brokerages have to say about Sun Pharma Q1 Results 2019-20:
JPMorgan
- Specialty investment to cap margin over the next year.
- Too early to play for earnings potential from specialty.
Edelweiss
- Believes that medium-term earnings growth will be challenging.
- Specialty business ramp-up slower than expected.
Morgan Stanley
- Positive operating leverage should help earnings momentum in FY21.
- Global specialty business should also gain commercial traction in coming quarters.
Credit Suisse
- Ilumya ramp-up may be slow with strong progress of Skyrizi—both drugs used to treat moderate-to-severe plaque psoriasis.
- U.S. sales to normalise from next quarter; India growth was good.
Investec
- First quarter beat was led by lower R&D costs, lower selling, general and administrative expenses and lower tax rate.
- Specialty initiative may take much longer to deliver significant returns.
CLSA
- Specialty product portfolio ramp-up a key catalyst.
- Improved disclosure was the highlight of the conference call.
Macquarie
- Underlying U.S. growth remains muted, thereby denting gross margin.
- Further delay in Cequa (chronic dry eye) launch is a setback.