Sun Pharma is India’s largest pharma company with 3 way near equal split in income from India domestic market, US generics and rest of the world. Performance for the past 2-3 years has been disappointing due to intense pricing pressure in the US generics market which is the principal source of revenues and profits. Investment in specialty portfolio, which has high gestation period, has affected return ratios but are now showing promise. Major risk is US FDA action and higher R&D costs for build up of the specialties product business. Keeping in mind the risks and opportunities particularly in the domestic market and higher healthcare spends in a post covid world, we have an Over Weight Rating. A lot hinges on the success of the company’s specialty products category, which at present is ~ 12% of sales but has the potential to be a significant money spinner in the medium term – 03-08-2021 Price: 794.85 Rating: Over Weight Recommendation: Buy
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