On Tuesday, CLSA updated its outlook on Sun Pharmaceutical Industries Ltd. (SUNP:IN) stock, increasing the price target to INR 1,820 from INR 1,720 while retaining a Hold rating on the stock. The adjustment follows Sun Pharma's second-quarter results, which matched CLSA's projections, propelled by robust performance in the U.S. market and improvements in gRevlimid sales.
Sun Pharma reported a 20.4% year-over-year increase in U.S. dollar sales in the United States and an 11% increase in its India business, attributed to high volume growth across all categories. The company's management also revised its research and development (R&D) expenditure forecast for the fiscal year 2025 to 7%-8% of revenue, down from the previous 8%-10% estimate. This change is due to delays in the initiation of clinical trials.
In response to the updated R&D guidance and recent performance, CLSA has made a slight upward revision to its earnings estimates for Sun Pharma, particularly for the fiscal years 2025-2026. This is primarily due to the anticipated reduction in R&D expenses.
The firm's valuation model has been rolled forward, shifting from June 2026 trailing twelve months (TTM) to September 2026 TTM earnings, which underpins the new target price. Despite the increase in the price target, CLSA maintains a Hold rating on Sun Pharmaceutical Industries Ltd., indicating a neutral stance on the stock's future movement.
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