Sun Pharmaceutical Industries Ltd shares dropped over 6% on Wednesday, wiping out all the gains of the previous session when the company had reported its June quarter earnings that beat analyst expectations.
At 10:27 am, Sun Pharma shares were trading at Rs 415.05, down 5.5%, after hitting an intra-day low of Rs 412. The stock had risen over 4% in the previous session.
Sun Pharma on Tuesday said its profit rose more than 31% year-on-year to Rs 1,387.50 crore on the back of healthy growth in its India and US businesses. Sequentially, profit grew by a whopping 118% during the quarter. Revenue from operations jumped nearly 16% to Rs 8,374.4 crore compared to the year-ago quarter.
After the earnings, CLSA maintained its ‘buy’ rating on the stock while raising the target price to Rs 540 per share from Rs 520 earlier. Investor focus will be on the ramp-up of its specialty pipeline, it said, adding that strong execution could drive re-rating.
HSBC has a ‘hold’ rating on the Sun Pharma stock with a target price of Rs 400 per share. Cost pressure is likely to continue due to the ongoing spend for Ilumya and Cequa, said HSBC, adding that the execution of speciality launches remain key for sustainable earnings growth.
In a separate development, Sun Pharma on Tuesday announced that its India and emerging markets head Kal Sundaram will now be responsible for Japan and China businesses besides the company's strategic initiatives. The India formulations business will now be handled by Kirti Ganorkar, who was earlier heading the global business development function, said Sun Pharma’s managing director Dilip Shanghvi.
Aalok Shanghvi will take over additional responsibility for generic business development in addition to his current role as senior VP, emerging markets and global R&D. The branded business development function will be handled by a new recruitment that is yet to be made, said Shanghvi.
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