Sun Pharma drops nearly 4% post Q3 results; brokerages slash EPS, target price
NEW DELHI: Sun Pharma shares shed as much as 3.7 per cent on the BSE on Wednesday, after global brokerage firms slashed their earnings per share (EPS) estimates as well as 12-month target price post-December quarter results.
Sun Pharma on Tuesday reported 4.72 per cent year-on-year decline in its consolidated net profit to Rs 1,471.82 crore for the third quarter ended December 31, 2016.
The company had posted a net profit after taxes, non-controlling interest and share of profit of associates and joint ventures of Rs 1,544.85 crore for the corresponding period of the previous fiscal, Sun Pharmaceutical Industries said in a filing to BSE.
At 09:40 am; Sun Pharma was trading 3 per cent lower at Rs 631. It hit a low of Rs 625.60 and a high of Rs 654 in the first 30-minutes of trade.
CLSA which maintains a buy rating on Sun Pharma post Q3 results slashed its 12-month target price to Rs 790 from Rs 800 which still translates into an upside of nearly 8 per cent from Tuesday's closing price of Rs 650.15.
The December quarter was soft and adverse sales mix drove gross margin to multi-year low, and impacted profitability, said the CLSA note. The near-term outlook could remain soft in absence of any major US launch, but valuation seems reasonable.
Consolidated total income from operations, however, rose to Rs 7,912.66 crore for the quarter under review, as against Rs 7122.31 crore in the same period a year ago.
Credit Suisse which maintains a neutral rating on Sun Pharma slashed its earnings per share estimates for FY17/18/19E by 3 per cent, 1 per cent, and 1 per cent respectively. It maintains a target price of Rs 620 which is lower than Tuesday's closing price of Rs 650.15.
The global brokerage firm prefers to stay cautious as the risk of DoJ investigation is high and thus slashed EPS estimates. About 10 per cent of FY18 EPS depends on Ranbaxy synergies, and Halol recovery, it said in a report.
Sun Pharma on Tuesday reported 4.72 per cent year-on-year decline in its consolidated net profit to Rs 1,471.82 crore for the third quarter ended December 31, 2016.
The company had posted a net profit after taxes, non-controlling interest and share of profit of associates and joint ventures of Rs 1,544.85 crore for the corresponding period of the previous fiscal, Sun Pharmaceutical Industries said in a filing to BSE.
At 09:40 am; Sun Pharma was trading 3 per cent lower at Rs 631. It hit a low of Rs 625.60 and a high of Rs 654 in the first 30-minutes of trade.
CLSA which maintains a buy rating on Sun Pharma post Q3 results slashed its 12-month target price to Rs 790 from Rs 800 which still translates into an upside of nearly 8 per cent from Tuesday's closing price of Rs 650.15.
The December quarter was soft and adverse sales mix drove gross margin to multi-year low, and impacted profitability, said the CLSA note. The near-term outlook could remain soft in absence of any major US launch, but valuation seems reasonable.
Consolidated total income from operations, however, rose to Rs 7,912.66 crore for the quarter under review, as against Rs 7122.31 crore in the same period a year ago.
Credit Suisse which maintains a neutral rating on Sun Pharma slashed its earnings per share estimates for FY17/18/19E by 3 per cent, 1 per cent, and 1 per cent respectively. It maintains a target price of Rs 620 which is lower than Tuesday's closing price of Rs 650.15.
The global brokerage firm prefers to stay cautious as the risk of DoJ investigation is high and thus slashed EPS estimates. About 10 per cent of FY18 EPS depends on Ranbaxy synergies, and Halol recovery, it said in a report.
