Don’t miss the latest developments in business and finance.

Sun Pharma nears 52-week high as stock surges 32% in five weeks

The stock was trading 2% higher at Rs 587 on the BSE in otherwise subdued market, trading nears to 52-week high of Rs 609 touched on February 12, 2018.

Pharma Stocks, Sun Pharma, Cadila, Cipla
Pharma Stocks, Sun Pharma, Cadila, Cipla
SI Reporter Mumbai
2 min read Last Updated : Jun 25 2018 | 10:06 AM IST
Shares of Sun Pharmaceutical Industries were trading 2% higher at Rs 587 per share on the BSE in an otherwise subdued market, nearing their 52-week high of Rs 609 per share touched on February 12, 2018.

The pharmaceutical stock which is quoting at its highest level since February 15, 2018, has rallied 32% in past five weeks as compared to 3% rise in the S&P BSE Sensex.

Since May 25, post its January-March (Q4FY18) results, Sun Pharma outperformed the market by surging 25% on expectation of revenue growth on the back of three speciality drug launches in US and growth across markets. The benchmark index was up 2% during the same period.

On June 12, the company announced the resolution of regulatory compliance issues at Halol plant. Halol plant was served a warning letter by US Food and Drug Administration (USFDA) in December 2015. No new products manufactured at the facility have been approved since September 2014 when it received adverse observations from the US regulator.

In a statement Dilip Shanghvi, managing director, Sun Pharma said, “This is an important development for Sun Pharma. We remain committed to following the highest levels of quality and 24x7 good manufacturing practices compliance at all our manufacturing facilities globally."

Sun Pharma’s weak results over the past year highlight the uncertainty in the U.S. generic environment, a lag in spending for specialty vs. revenue ramp-up, and a delay of Halol clearance into FY19.

“While we still see Sun as the best positioned to transition into specialty pharma over the medium term, we believe near-term headwinds could yield a better entry point to focus on the upside from specialty, which will contribute meaningfully only from FY20E. We think stable and then sustained improvement in operating performance and clearance of the Halol facility will likely be key drivers for the stock from here,” analysts at JP Morgan said in recent report.
 

Topics :Sun Pharma

Next Story