Sun Pharma slumps on profit booking despite strong results

wealth desk

To buy to sell Sun Pharma to share

Shares of industry Sun Pharmaceuticals fell nearly 3% despite the big pharma reporting a 43% growth in consolidated net profit for the April-June quarter.

The pharmaceutical company’s net profit for the April-June quarter stood at Rs 2,061 crore, jumping nearly 43% from Rs 1,444 crore in the corresponding period a year ago.

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The pharmaceutical major’s consolidated revenue rose 10.7% in the quarter ending June to Rs 10,762 crore from Rs 9,719 crore for the corresponding period a year ago.

Analysts also see investors booking profits as a reason for the stock’s decline.

“It can be said that some profit taking is taking place in the market after the substantial growth in stocks in recent days,” said Bhavesh Gandhi, AVP-Research, IIFL.

Over the past five days, the stock has gained over 5% and rebounded over 10% in the past month.

Brokerage Views

Jefferies has a buy rating on Sun Pharmaceuticals at a target price of Rs 1,089, while CLSA has also maintained a buy rating on the pharmaceutical stock with a target price of Rs 1,140.

CLSA believes that Sun Pharmaceutical’s strong core businesses, consisting of Indian formulations and diversified operations in emerging markets, can help the stock perform well.

Morgan Stanley has maintained an “overweight” rating on the company’s shares with a target price of Rs 1,032. The brokerage firm notes that expanding into important new markets will boost the pharmaceutical company’s growth.

First post: STI