 "Kotak Stock Recommendations")
Stock recommendations:
Sun Pharma – ADD
CMP: ₹1,695
FV: ₹1850
Support: 1660-1600
Resistance: 1770-1830
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In India, Sun Pharma remains a metro-centric player with an increasing presence in Tier 1-3 cities. In the past five years, apart from MR additions (~50 per cent increase in MR count in the past five years) and new launches, there have been lot of efforts in adding the right set of people, upskilling employees, deeper engagement with doctors and brand building of existing products. This has driven continued volume and value outperformance for Sun Pharma in the IPM in the past five years. Sun Pharma has consistently maintained its top rank in the IPM in the past decade. As of FY2025, the company held the leading position in 14 therapies within the IPM. The company intends to strengthen its market leadership and also focus on expanding its presence in chronic therapeutic areas.
Over the years, Sun Pharma has carefully developed a robust portfolio within its global Innovative Medicines segment (~20% of FY2025 sales), focused around the therapies of dermatology, ophthalmology and onco-dermatology. Within Innovative Medicines, Ilumya, Winlevi, Cequa and Odomzo remain the four growth products for Sun Pharma. Sun Pharma continues to actively scout for Phase -II/III assets. It is looking to set up a greenfield plant in India to cater to exports, particularly for generics. This facility is expected to complement Sun Pharma’s existing US facilities, such as Halol, Mohali and Baska.
With an already large-scale presence in the US, Sun Pharma is now exploring opportunities to commercialize select specialty products outside the US. However, such expansion will be contingent on licensing and partnership arrangements. Despite a higher tax rate and launch expenses, we expect Sun Pharma to report a healthy 12 per cent EPS CAGR over FY2025-28E, with the steady traction in ex-US generics markets driving operating leverage. Sun Pharma stays our preferred large cap pharma
Indus Towers – BUY
CMP: ₹374
FV: ₹400
Support: 355-345
Resistance: 380-400
Indus Towers - one of the largest telecom tower companies globally. Indus is India’s leading provider of passive telecom infrastructure, and it deploys, owns, and manages telecom towers and communication structures for various mobile operators. Indus plans to venture into select countries (Nigeria/Uganda/Zambia), where Airtel’s (AAF) has a high market share and the tower business is favorable. Africa can potentially aid growth in the core tower business, as tower additions are
maturing in India. The tower industry has consolidated with top-2 having +60 per cent share (Indus Towers, 32.0 per cent). We are building a 90 per cent payout during FY26-28E. ARP per tower is expected to inch up with an increase in tenancy. (Shrikant Chouhan is the head of equity research at Kotak Securities. Views expressed are his own.)
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