For 3QFY2019, Sun Pharma posted robust numbers. For the quarter, the sales came in at
`7,657cr v/s. `6,598cr in 3QFY2018, registering a yoy growth of 16.0%. India sales at
`2,235cr, were up by 7%, while US finished dosage sales at US$362mn up 10% yoy V/s
3QFY2018. On the OPM front, the gross margins came in at 71.7% v/s. 68.2% in
3QFY2018, which lead the EBDITA margins to come in at 27.0% v/s. 21.2% in 3QFY2018.
This along with a 63.8% yoy dip in tax expenses led the Adj. net profit to come in at `1,242cr v/s. `322cr in 3QFY2018, a yoy growth of 286.2%. We maintain our Neutral.

Outlook and valuation: Sun Pharma is expected to post net sales CAGR of 12.1%, while
EPS will post a CAGR of ~27% during FY2018–21E. The growth would be mainly driven by
improved product mix. However, given the concerns on corporate governance and riskreward,we remain Neutral. Also, current valuations capturer the best-case scenario for the company.

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