Q4 Results: Sun Pharma declines near 4% amid profit-booking – Check what brokerages have to say

Amid profit booking and lower-than-expected quarter-four estimates, Sun Pharma declined around four per cent to Rs 673 per share at around 2:30 pm on the BSE intraday trade on Friday. The stock is the top laggard in the Nifty Pharma index, which is declined most than its sectoral peers. 

Missing the street’s expectations, the pharma major has pushed the brokerages to be sceptical about the pharma major. In this regard, Credit Suisse has an Underperform call on Sun Pharma as it expects Specialty sales missed estimates in Q4 and it would continue to decline further in the first quarter of FY22.  

Sun Pharma, on Thursday, reported a jump of 124 per cent year-on-year (YoY) growth in the net profit in Q4 of FY21 at Rs 894 crore, mainly on operational efficiencies. 

The stock, in the last three months, outperformed the market by gaining nearly 20 per cent, as compared to a 4.6 per cent rise in the S&P BSE Sensex, till Thursday. 

On the other hand, CLSA maintains a Buy call on Sun Pharma with an expectation of a PE rerating. It sets a target of Rs 850 per share as key speciality products are gaining ground, and raises the FY22 and FY23 EPS estimate by one to three per cent respectively. 

The company in management commentary said it is evaluating to develop a new pipeline of biosimilars as its R&D (research and development) focus. It has also requested for an inspection of the Halol site in Gujarat.  

Setting a target near the previous close, Morgan Stanley has an Overweight rating on Sun Pharma. It points out speciality Ramp-up, strong biosimilars, and Halol remediation key drivers. The brokerage firm sets a target of Rs 705 per share. The stock on Thursday closed at around Rs 700 on BSE.  

Sun Pharma’s consolidated sales from operations were reported at Rs 8,431 crore, up 4.4 per cent YoY, and when compared to Q4 of FY19, it is up 19 per cent. Sales were down 4 per cent sequentially.