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Sun Pharma slips nearly 2% in an otherwise strong market

The pharma company had reported a nearly four-fold jump in its consolidated net profit at Rs 1,241.85 crore for the third quarter of financial year 2018-19(FY18-19).

SI Reporter  |  New Delhi 

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Shares of on Wednesday slipped nearly 2 per cent in the early trade on after reports suggested has sought an explanation from the company on the alleged fund diversion of Rs 42,000 crore through its key distributor and subsidiary Aditya Mediasales (AML).

In two letters dated January 28 and February 18, the regulator asked to furnish a detailed methodology of AML’s operations, along with the agreement between the drugmaker and AML, said a Business Standard report. READ MORE

The pharma company had reported a nearly four-fold jump in its consolidated net profit at Rs 1,241.85 crore for the third quarter of financial year 2018-19(FY18-19). Consolidated revenue from operations of the company stood at Rs 7,740.19 crore for the quarter under consideration as against Rs 6.653.23 crore for the same period year ago.

Following the result announcement, Centrum Broking upgraded the stock to 'BUY' from Hold with a target price (TP) of Rs 510 (Rs 550 earlier) based on 26x March’21E EPS of Rs 19.5.

"has developed a strong pipeline of specialty products for the US and has received 4 ANDA approvals for its Halol facility. Key downside risk to our call is regulatory risks for its manufacturing facilities catering to global markets," wrote Ranjit Kapadia, research analyst at the brokerage firm in a post-results report dated February 14.

Analysts at Motilal Oswal Financial Services have also 'buy' call on the stock with a target price of Rs 540. "We remain positive on the company’s business model, which focuses on building a specialty portfolio in the

regulated market and increasing traction in US generics, among others. Resolution of corporate governance issues is a key monitorable."

At 09:51 am, the stock was trading 1.74 per cent lower at Rs 447.80 apiece on In comparison, the S&P was trading 130 points higher at 36,572 levels.

First Published: Wed, March 06 2019. 09:55 IST
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