Sun Pharma hits 52-week high on USFDA approval, good Q1 results

Sun Pharm hit a 52-week high of Rs 618, up 3%, extending its Tuesday's 7% rally on the BSE.

Shares of Sun Pharmaceutical Industries hit its 52-week high of Rs 618, up 3% on the BSE in intra-day trade on Thursday, after the company announced that it has received approval for CEQUA from the U.S. Food and Drug Administration (FDA).

CEQUA is indicated to increase tear production in patients with keratoconjunctivitis sicca (dry eye).

CEQUA (cyclosporine ophthalmic solution) 0.09%, for topical ophthalmic use will be commercialized in the U.S. by Sun Ophthalmics, the branded ophthalmics division of Sun Pharma’s wholly owned subsidiary.

Meanwhile, an analyst at SBICAP Securities maintain ‘buy’ rating on the stock with 12-month target price of Rs 640 after the Sun Pharma reported a better than expected June quarter (Q1FY19) results.

“Sun Pharma’s Q1FY19 revenue and EBITDA beat our estimates by 7% and 4% respectively. Revenue beat was driven by higher-than-expected revenue in the US (ex-Taro) and solid growth in India and EMs. EBITDA of Rs 16,067 million beat our estimate by 4%, driven by higher revenue and lower-than-expected R&D costs, partially offset by higher COGS,” the brokerage firm said in result review.

Importantly, the management reaffirmed low double-digit topline growth in FY19, driven by four specialty launches in the US, product launches from Halol and continued growth in India and ROW, which will be partially offset by continued pricing pressure in the US base business. We largely maintain our FY19 estimates. Our FY20 revenue and EBITDA have been increased marginally to reflect the uptick from a flurry of approvals expected from the Halol plant, it added.

At 11:00 am; Sun Pharma was trading 2% higher at Rs 612, after rallied 7% on Tuesday. On comparison, the S&P BSE Sensex was down 0.04% at 37,837 points. The trading volumes on the counter nearly doubled with a combined 1.41 million equity shares changed hands on the BSE and NSE.