Upcoming: After 1,150% Dividend, Sun Pharma Is Set To Reward Investors Again, Q3 In Focus; Buy This Stock?

Healthcare giant, Sun Pharmaceuticals is the next big focus in the sector. The company is set to announce its Q3 results on January 31. And not just that Sun Pharma will also reward its investors with an interim dividend for FY24. There is a potential of nearly 12% upside in Sun Pharma.

As per the regulatory filing, Sun Pharma said, "The Board of Directors of Sun Pharmaceutical Industries Limited is scheduled to be held on Wednesday, January 31, 2024, inter alia,

1. To consider and approve Unaudited Standalone and Consolidated Financial Results of the Company for the quarter and nine months ended December 31, 2023

2. To consider and approve the declaration of Interim Dividend for the financial year 2023-24."

Sun Pharma Dividend

For the upcoming dividend, the company has already fixed the record date. It said, "The Interim Dividend, if declared, shall be paid to the equity shareholders of the Company whose names appear on the Register of Members as of February 9, 2024, which is the Record Date fixed for this purpose."

Hence. Sun Pharma stock will also turn ex-dividend on February 9.

Last year, Sun Pharma paid a massive 1150% dividend amounting to Rs 11.5 per share. On the current market price, Sun Pharma has a dividend yield of 0.87%.

On BSE, Sun Pharma's share is currently at Rs 1,325.85 apiece. On Saturday, January 20, when the market were holding a regular trading session ahead of the Ayodhya Ram Mandir ceremony, Sun Pharma stock climbed to hit a new 52-week high. Currently, it has a market cap of Rs 3,18,108.37 crore. In a year, Sun Pharma stock zoomed by 26.55% on the exchange.

What to expect from Sun Pharma in Q3?

In its preview report, Prabhudas Lilladher said, "Over the last few years SUNP dependency on US generics has reduced and company's growth is more functional on US specialty, RoW and domestic pharma business that continues to show strong growth visibility."

PL's note added, "Specialty product portfolio and domestic business to deliver growth YoY. Domestic formulation business to grow at 11% YoY. Outlook on overheads and margins will be key monitorables."

In the quarter, PL expects sales to be at Rs 12,405.1 crore, up by 10.4% YoY and 1.7% QoQ. EBITDA is seen at Rs 3,354.5 crore, up by 11.6% YoY and 4.4% QoQ. Adjusted PAT is factored at Rs 2,460 crore, up by 13.6% YoY and 3.6% QoQ in Q3FY24.

JM Financial in its note said, "We expect ~10% domestic growth and strong specialty sales of USD 268mn. We bake USD 20mn from gRevlimid." The brokerage has recommended buying Sun Pharma for a target price of Rs 1,440 in 12 months.

In its latest research note dated January 18, Elara Capital said, "We maintain our FY24E-26E core earnings estimates. SUNP trades at 31.5x core FY25E EPS. Valuations may seem a bit stretched after the recent run-up in stock price, but we expect these to sustain given the high chances of continuous earnings upgrades from the US generics up-cycle and operating leverage in the specialty business."

Further, Elara's note said, "We raise our TP from Rs 1,246 to Rs 1,484, which is 31x FY26E core EPS plus cash per share. Delay in the US launch of Deuruxolitinib and slower recovery in US generics profitability are key risks to our call and estimates."

Disclaimer: The recommendations made above are by market analysts and are not advised by either the author nor Greynium Information Technologies. The author, nor the brokerage firm nor Greynium would be liable for any losses caused as a result of decisions based on this write-up. Goodreturns.in advises users to consult with certified experts before making any investment decision.