Sun Pharma - Leveraging Global Specialty Pipeline To Aid Growth: Nirmal Bang
In Q1, global specialty saw a sequential decline due to Levulan seasonality effect, which has normalised in Q2 FY24.
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Nirmal Bang Report
We hosted the management of Sun Pharmaceutical Industries Ltd., to gain insights into the current business outlook. Scaling up of the global specialty portfolio would remain the key focus area, with Ilumya, Winlevi and Cequa being the main growth drivers.
In India, the target would be to grow in line or slightly faster than the market on the back of addition of MRs and new launches. Emerging market and redistribution of wealth growth would be aided by leveraging of the global specialty portfolio.
We remain positive on Sun Pharma due to the following catalysts:
Ramp-up of branded/specialty business in the U.S. (recently acquired Deuroxolitinib would further strengthen specialty pipeline)
Continued growth in India business
Potential inorganic opportunity given the strong balance sheet, especially in dermatology, ophthalmology and oncology specialty.
Maintenance of healthy Ebitda margin at ~27% despite higher research and development spends.
We maintain 'Buy' with a revised target price of Rs 1,315, valuing it at 28 times June-25E earning per share of Rs 47.
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