Sun Pharma stock tumbles 8.5 per cent at market closing: Should you buy? Check for Rs 420 magical figure

Sun Pharmaceuticals Industries witnessed another tough day in share market as its stock fell by Rs 36.30 on Friday. Sun Pharmaceuticals closed at Rs 390.75, dipped 8.51 per cent to near six-year low. The stock hit by reports that a whistle-blower filed a complaint to regulators over transactions involving the top Indian drug-maker and its co-promoter. The whistle-blower alleged in a 172-page complaint that Sun Pharma`s distributor Aditya Medisales had performed transactions worth more than 58 billion rupees ($815 million) with Suraksha Realty, controlled by Sun`s co-promoter Sudhir Valia, a report by Moneylife magazine said. 

Sr. Equity Analyst, Rohit Singre, LKP Securities told Zee Business Online, ''The stock is down because of news, however technically it is weak right now. Investors are suggested to avoid until further clearance on the allegations.'' 

The stock has been in a correction mood since last month due to its corporate governance issues and a product recall. Shares of Sun Pharma, India`s top drug-maker lost nearly $1.5 billion of its market value on Friday. The complaint, done to the market regulator Securities and Exchange Board of India (SEBI), is the second in a period of month and comes as Sun Pharma is already struggling a product recall and regulatory investigation over reported insider trading.

''The stock is weak on charts. No fresh buying is suggested until the stock crosses Rs 420. However once the stock stabilises, targets of Rs 480 to Rs 500 can be set,'' Singre added.

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However, The company mentioned in a filing to Indian stock exchange on Friday that it has not received the complaint.

In December, a media report said SEBI, helped by a whistle-blower tip off, was likely to reopen an insider trading case against Sun and probe alleged lapses by some of Sun`s promoters in raising funds overseas.

Earlier this month, Sun recalled muscle relaxant vecuronium bromide for injection due to the presence of glass.