Sun Pharma stares at sharp earnings downgrades

A muted revenue outlook and higher costs will keep margins and earnings under pressure in FY18

A weak revenue outlook for FY18,  pricing pressure in the US, a high cost base, and investments in building a speciality drug pipeline will continue to put pressure on Sun Pharma’s margins for the next few quarters.
 
Given the near-term outlook, especially related to the US business and the weak June quarter results announced on Friday, analysts have cut their consolidated earnings estimates for FY18 and FY19. Centrum Broking’s Ranjit Kapadia believes net profit estimates for 2017-18 and 2018-19 could be revised downwards by a further 10-15 per cent. The earnings downgrades by Emkay Global’s Jatin Kotian and Vishal