Shares of Sun Pharmaceutical Industries came under pressure on Tuesday after BofA Securities downgraded the stock to “Underperform” from its earlier positive stance, while also cutting the target price to ₹1,570 per share from ₹1,730.
At 9:45 am, the stock was trading at ₹1,622.10, down 2.1%, compared with the previous close of ₹1,656.70. During early trade, the stock hit a low of ₹1,616.60.
BofA noted that while Sun Pharma’s specialty-driven earnings provide medium-term visibility, the ramp-up from new launches is expected to be gradual compared to consensus estimates. The brokerage also highlighted risks of disappointment in scaling up its recently acquired and launched specialty assets.
Further, BofA pointed out that news flow around Most Favoured Nation (MFN) regulations remains an overhang on Sun Pharma’s key specialty drug, Ilumya. The firm also raised concerns over the stock’s valuation, which currently trades at 32x FY27 P/E versus its 10-year average of 25.5x.
Sun Pharma, however, continues to explore growth opportunities in specialty-driven M&A, though BofA believes this option is already priced in, leaving downside risks if execution falls short.
Disclaimer: This article is based on brokerage commentary and stock exchange data. It is not investment advice.
