On Tuesday, UBS reaffirmed its confidence in Sun Pharmaceutical Industries Ltd. (SUNP:IN) stock, maintaining a Buy rating and a price target of INR2,450.00. The firm's positive outlook follows Sun Pharma's impressive performance in the second quarter of the fiscal year 2025, which saw an EBITDA beat of 5% and a notable 19% year-over-year increase in specialty revenues.
The company's financial success was attributed to significant growth in both its US specialty segment, which rose by 7.5% quarter-over-quarter, and its US generics business, which saw a 14% increase from the previous quarter. This growth in the US generics was partly fueled by higher revenues from the generic version of Revlimid.
Despite facing a substantial rise in other expenses, amounting to Rs 4.5 billion quarter-over-quarter due to costs associated with the launch of Ilova, Sun Pharma still managed to surpass EBITDA expectations. The additional expenses were largely offset by the incremental benefits gained from the generic Revlimid.
Sun Pharma's performance in the Indian market was also robust, with an 11% year-over-year growth, which outpaced the overall market growth of 8% in the same period. Additionally, the company has revised its research and development (R&D) expenditure guidance for the year, reducing it from the previously projected range of 8-10% of revenues to 7-8%, citing slower progress in clinical trials.
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