Sun Pharma shares may see short-term pressure, say most analysts post Q4

Shares of Sun Pharmaceutical Industries Ltd. will be in focus on Thursday, May 23, as a couple of top brokerage firms have shared mixed views on the stock following its fourth-quarter earnings.

Sun Pharma shares have gained 30% over the last six-month period and risen 24% so far this year.

Here’s a look at the target price for Sun Pharma shares:

Following Sun Pharma’s fourth-quarter earnings announcement, global brokerage firm Citi has maintained a ‘buy’ on the counter with a target price of ₹1,640 per share. It sees an upside of 5% from the stock’s closing levels on Wednesday.

The foreign brokerage expects the stock to remain under pressure in the near term.

Citi said the country’s largest drug manufacturer reported an in-line quarter, but the guidance indicates margin pressure in the financial year 2025.

The brokerage in a note said Sun Pharma has margin levers but sees a possibility that FY25 margins may remain subdued. However, Citi believes underlying business trends as well as the medium and long-term margin expansion story remain intact.

JPMorgan has maintained its ‘overweight’ stance on the Sun Pharma stock and raised its target price to ₹1,610 from ₹1,600 a share earlier.

According to the brokerage, the drug manufacturer is entering an investment phase and its key businesses continue to strengthen.

JPMorgan said that it would continue to monitor R&D spending as historically the company has underspent against its guidance.

Nomura, meanwhile, has a ‘neutral’ recommendation on Sun Pharma with a price target of ₹1,444 per share, implying a downside of nearly 8% going ahead.

Nomura said Sun Pharma’s March quarter earnings and FY25 guidance were below estimates. Also, its fourth-quarter sales and EBITDA came below estimates by 5% and 4%, respectively.

According to the brokerage, the company expects its revenue growth in high single-digits in FY25.

As per Nomura, in the near term, Sun Pharma’s earnings momentum is stalled as the company is stepping up investments in speciality.

On Wednesday, the Sun Pharma stock settled 1.50% higher at ₹1,564 apiece on the NSE.