SUN PHARMA : CMP : 475 , Price Target 1 : around 640 , Price target 2 :around 740.Possible downside to a 365 to 400 range however cannot be ruled out.
Sun Pharma at the current market price (CMP) of 475 has a cash P/E at 16.37 and P/BV at 3.11 .Looking at the strong downward momentum and ” stay – away ” , “avoidable” view on the pharma sector , the stock may be hammered down towards 365 to 400 levels , however alternately the valuations are BECOMING attractive and so are the technicals.
FY 17
FY 16
FY 15
FY 14
FY 13
Consolidated Net profit (crs)
6964
4715
4539
3141
2983
BV PER SHARE
152
130.47
123.49
89.44
59.08
Price Low
571
704
570
405
277
Price High
841
1200
1075
651
424
Price low to BV
3.76
5.40
4.62
4.53
4.69
Price High to BV
5.53
9.20
8.71
7.28
7.18
EPS
29.03
19.6
21.92
15.17
14.43
Price Low to EPS
19.67
35.92
26.00
26.70
19.20
Price High to EPS
28.97
61.22
49.04
42.91
29.38
Assuming 50% drop in Consolidated Net Profit
3482
3482
3482
Shares O/s as of March 17
239.93
239.93
239.93
EPS
14.51
14.51
14.51
Assumed Valuation P/E
15
217.69
217.69
217.69
16
232.20
232.20
232.20
17
246.71
246.71
246.71
18
261.23
261.23
261.23
19
275.74
275.74
275.74
Assuming 40% drop in Consolidated Net Profit
4178.4
4178.4
4178.4
Shares O/s as of March 17
239.93
239.93
239.93
EPS
17.42
17.42
17.42
Assumed Valuation P/E
15
261.23
261.23
261.23
16
278.64
278.64
278.64
17
296.06
296.06
296.06
18
313.47
313.47
313.47
19
330.89
330.89
330.89
Assuming 30% drop in Consolidated Net Profit
4874.8
4874.8
4874.8
Shares O/s as of March 17
239.93
239.93
239.93
EPS
20.32
20.32
20.32
Assumed Valuation P/E
15
304.76
304.76
304.76
16
325.08
325.08
325.08
17
345.40
345.40
345.40
18
365.72
365.72
365.72
19
386.03
386.03
386.03
Assuming the profit falls by 30% and a P/E of 18 is applied the price should be around 365 and a P/BV of 2.40 which is a very attractive level. That also assumes that going forward the profits stay flat, assuming the P/E multiple still remains at 18 for a rudimentary valuation.
