Elara maintains sell on Sun Pharma; price target at Rs 410
Elara Capital has maintained a sell rating on Sun Pharmaceuticals with a price target of Rs410 citing expensive valuations and hazy business prospects.
By ET Bureau | Updated:
MUMBAI: Elara Capital has maintained a sell rating on Sun Pharmaceuticals with a price target of Rs410 citing expensive valuations and hazy business prospects.
"Taro acquisition enhances the company’s portfolio in branded generics. Despite adding Taro’s earnings, we find the current valuation expensive and the current price discounting the improved fundamentals," said Surajit Pal, analyst at Elara Capital, in a report.
Sun shares were trading at 478.25, up 1.6% at 1:25 PM on Thursday. The benchmark Sensex was own 0.6% at 18,504.07.
"While domestic formulations maintain strong traction, Sun Pharma has not seen fresh momentum in its core business in the US last fiscal. With low visibility of a resolution of its USFDA issues, our conviction of better US sales is low,"Pal said.
The company’s operating profit margins could be impacted in 2011-12 and 2012-13.
"We expect para-IV pipeline to face stiff competition in FY12-13 in the US due to competitors’ better market reach and superior product," the brokerage said.
"Taro acquisition enhances the company’s portfolio in branded generics. Despite adding Taro’s earnings, we find the current valuation expensive and the current price discounting the improved fundamentals," said Surajit Pal, analyst at Elara Capital, in a report.
Sun shares were trading at 478.25, up 1.6% at 1:25 PM on Thursday. The benchmark Sensex was own 0.6% at 18,504.07.
"While domestic formulations maintain strong traction, Sun Pharma has not seen fresh momentum in its core business in the US last fiscal. With low visibility of a resolution of its USFDA issues, our conviction of better US sales is low,"Pal said.
The company’s operating profit margins could be impacted in 2011-12 and 2012-13.
"We expect para-IV pipeline to face stiff competition in FY12-13 in the US due to competitors’ better market reach and superior product," the brokerage said.
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