Sun Pharma surges post Q1 results

The stock has moved higher by 5% to Rs 885 on the BSE in intra-day trades.

Shares of Sun Pharmaceutical Industries have moved higher by 5% to Rs 885 on the BSE in intra-day trades on the back of a sequential improvement in operating performance and positive management commentary.

The pharma major on Wednesday reported a 60% year-on-year (Y-o-Y) drop in its consolidated net profit at Rs 479 crore for the quarter ended June 2015 (Q1) against Rs 1,205 crore in the year-ago quarter.

The drug company said that the net profit for the quarter was adversely impacted by one-time items as well as exceptional charges of Rs 685 crore. These exceptional charges relate to impairment of fixed assets and goodwill and other related costs and have arisen on account of integration and optimization measures.

Meanwhile, Nitin Agarwal and Param Desai, analysts at IDFC Securities have maintained an outperformer with accumulate rating on the stock.

The quarter-on-quarter improvement in operating performance, combined with more positive management commentary, is encouraging and gives us comfort that the worst is probably behind us in terms of near- term operational challenges, the analysts said in a research report.

Recent approval for Taro’s Keveyis, a drug on which Sun is likely to enjoy 7-year orphan drug exclusivity, underscores the quality and value inherent in Sun’s pipeline. Smooth execution of this strategy to graduate to a speciality player would put Sun in a new orbit, the report added.

At 11:28 AM, the stock was up 4% at Rs 876 on the BSE, compared to a 0.42% decline in the S&P BSE Sensex. The trading volumes on the counter nearly doubled, with a combined 3.82 million shares changing hands on the counter on the BSE and NSE.