Sun Pharma’s Profits Soar 28%, But Stock Falls 2% – Should You Buy or Sell?
Despite reporting a strong performance in the second quarter (Q2FY25), Sun Pharmaceutical Industries shares dropped 2% today. The pharmaceutical giant achieved a 28% jump in net profit, reaching Rs 3,040 crore. Yet, mixed analyst thoughts and worries over future spending raised doubts among investors.
Key Highlights of Sun Pharma’s Q2 Results:
- Net Profit: Up 28% to Rs 3,040 crore
- Revenue from Operations: Grew 9% YoY to Rs 13,291 crore
- EBITDA: Increased 24% YoY to Rs 3,939 crore with a 29.6% EBITDA margin
- India Sales: Formulation sales rose 11% YoY to Rs 4,265 crore
- US Sales: Jumped 20% YoY to $517 million
- ROW Sales: Dropped 3% YoY to $199 million
- API Sales: External sales rose 7% YoY to Rs 534 crore
Analyst Opinions:
There’s a divide among analysts on Sun Pharma’s stock performance.
- Jefferies: Maintains a “Buy” rating, raising the target price to Rs 2,150 (from Rs 2,000).
- Goldman Sachs: Holds a “Sell” rating, mentioning concerns over higher R&D expenses and launch costs shortly.
What’s Causing the Share Price Dip?
Despite strong earnings, investors seem nervous about future expenses. Specialists warn that Sun Pharma’s increasing R&D investments and new product launch costs could affect profit margins in upcoming quarters.
Should You Buy, Hold, or Sell?
With analysts divided, it depends on your risk hunger. Jefferies believes the company has good growth potential, recommending buying the stock. Meanwhile, Goldman Sachs advises caution due to expected cost forces.
Sun Pharma’s future will likely depend on how well it balances its growth investments with profitability. Investors need to keep an eye on upcoming product launches and R&D expenses before making decisions.
