Sun Pharma slips on profit warnings ahead of June quarter results

NEW DELHI: Sun Pharma Ltd slipped as much as 15.6 per cent in trade on Tuesday. India's largest drug maker, said that its revenue in fiscal year 2016 would be flat at best and may impact the bottom line as it struggles to fix manufacturing problems at Ranbaxy Laboratories.

It implies that the Ranbaxy integration along with the remediation process of US FDA compliance issue at the Sun's Halol plant has started impacting the growth of the overall business, said an ET report.

The profit warning is not likely to go down well with the investor community - with a significant correction and earnings downgrades in offing for the Sun stock in the near term, added the ET report.

The stock has appreciated 28 per cent since the past one year, against 57 per cent gains made by ET Pharma Index.

Brokerage firm Jefferies is of the view that the miss, in our view, is largely due to one-off issues (Halol disruptions and integration costs) and are non-recurring.

"With business fundamentals remaining intact, our F17 number sees only marginal downgrade and we retain our Buy rating with target price of Rs 1,100," added the report.