New York: 19:08 || London: 00:08 || Mumbai: 05:38 || Singapore: 08:08

Recommendations India

Sun Pharma 4QFY2014 performance highlights and results update

June 3, 2014, Tuesday, 11:06 GMT | 06:06 EST | 15:36 IST | 18:06 SGT
Contributed by Angel Broking


Sun Pharmaceutical Industries (Sun Pharma) posted a good set of numbers for 4QFY2014, mostly in line with our expectations on the topline and OPM front, while the net profit came in better than expected. The company posted sales of Rs.4,044cr V/s an expected Rs.4,000cr, registering a yoy growth of 31.6%. The OPM came in line of our expectation at 44.5% as against 41.0% in 4QFY2013. The adj. net profit for the quarter came in at Rs.1,587cr, a yoy growth of 56.9%, and higher than our estimate of Rs.1,401cr. We recommend a Buy on the stock with a price target of Rs.706.

Better-than-expected results on net profit front: Sun Pharma posted a good set of numbers for 4QFY2014, mostly in line with our expectations on the top-line and OPM fronts, while the net profit came in higher than our expectation. The company posted sales of Rs.4,044cr (V/s an expected Rs.4,000cr), registering a yoy growth of 31.6%. Exports, which grew by 34.8% yoy and domestic markets which grew by 21.4% yoy each, aided sales growth. The OPM came in line of our expectation at 44.5% V/s 41.5% in 4QFY2013. While sales and OPM came in line of our expectation for the quarter, the net profit came in higher than our expectation on back of higher other income, which grew by 90% yoy. The net profit for the quarter came in at Rs.1587.1cr, a yoy growth of 56.9%, higher than our expectation of Rs.1,401cr.

Outlook and valuation: Sun Pharma is one of the largest and fastest growing Indian pharmaceutical companies. We expect its net sales to post a 25.4% CAGR (including Ranbaxy Laboratories) to Rs.38,186cr and EPS to post a 5.3% CAGR to Rs.32.1 over FY2014–16. We recommend a Buy on the stock with a target price of Rs.706.

Stock Market Forum