Sun Pharma has potential to gain another 15-20%: Mayuresh Joshi, Angel Broking

In a chat with ET Now, ayuresh Joshi, VP, Institution, Angel Broking, shares his view on Sun Pharmaceuticals. Excerpts:

ET Now: Sun Pharma stock rallied yesterday after SPARC, the subsidiary of pharma major, received USFDA approval for antiepileptic drug. How do you view that development and what is the call on Sun Pharma now?

Mayuresh Joshi: Sun Pharma has been one of the top-performing pharma stocks. Clearly, the developments that have taken place for the past few days auger well for the company in a big manner. We are yet to roll over to FY17 numbers, but we expect FY17 numbers will indicate strong earnings growth for Sun Pharma.

The drug maker has got a strong ANDA pipeline from the drug approval. After the merger with Ranbaxy, the drug maker will cover all the niche area; it would cover all possible segments of the generic markets. One must also note that the cash position on Sun Pharma’s book is extremely strong.

Even as the consolidated return on equity (ROE) will be much lesser than what Sun Pharma used to derive on a standalone basis, its balance sheet size would probably be among the top five drug makers in the world. It indicates the kind of franchise and the management control that Shanghvi has. So, we still believe that Sun Pharma is a brilliant story to play out with investors.

They should hold on to this stock . We believe that once the numbers are old over a 15-20 per cent upside on the stock even from the current levels is not ruled out.