Sun Pharma Shares Volatile After Q4: Buy, Sell Or Hold?

Shares of Sun Pharma were volatile in the early hours of trading on Monday after the company posted its earnings for the quarter ended March.

What Happened: The company’s total revenue from operations grew 15.71% to ₹10,930.67 crore compared to the ₹9,446.76 crore revenue it booked in the same quarter last year. The company reported a net profit of ₹1,984.5 crore in the March quarter against a loss of ₹2,277.2 crore in the corresponding quarter last year. The company’s bottom line came in slightly above consensus estimates of around ₹1,850 crore-₹1,900 crore.

The company’s EBITDA for the period stood at ₹2,802.1 crore, up 19.73% from the year-ago period. EBITDA margin for the review quarter stood at 25.64%. Earnings per share for the quarter came in at ₹8.3. The country’s biggest pharma company also announced a ₹4/share dividend for the year ended March.

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The sentiment around the stock seems to have dampened as the company on Saturday, May 27, announced its intent to fully acquire Taro Pharma. Currently, the drugmaker owns a 78.48% stake in the company. The proposal is for the remaining shares for the price of $38/share. “The Purchase
Price represents a premium of 31.2% over Taro’s closing price on May 25, 2023, a 41.5% premium over Taro’s average closing price in the last 60 days,” the company added in a statement.

Brokerage Calls

Here is how analysts reacted to the company’s Q4 numbers.

Research Firm	Calls	Target Price
Jefferies	‘Buy’ Maintained	₹1,150 cut down from ₹1,200
Nomura	‘Buy’ Maintained	₹1,132
Investec	‘Buy’ Maintained	₹1,200
Credit Suisse	‘Outperform’ Maintained	₹1,100

Price Action: Sun Pharma’s share price was down 0.93% to trade at ₹960.85 as the markets opened on Monday.

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