Sun Pharma gains 2%; BofA ML sets target at Rs 1,070

NEW DELHI: Shares of Sun Pharmaceuticals gained 2 per cent in Tuesday's trade on value buying by traders. Bank of America-Meryll Lynch has given a 'buy' rating on the stock with a target price of Rs 1,070.

The ratings update saw the scrip gain 1.68 per cent to hit a high of Rs 752.75.

"The market has factored in the worst possible outcome at the pharma company's Halol plant," the brokerage said. The plant, which has been under intense regulatory scrutiny of the USFDA, came to Sun Pharma as part of its Ranbaxy acquisition last year.

BofA-ML said, "The potential upside for the stock could be over 40 per cent if the Halol issue does not escalate."

However, the brokerage said the fair value of the stock would work out to be Rs 757 in case the pharma giant receives an import alert from the US drug regulator for the plant.