Sun Pharma among 20 most valued Indian companies after market cap crosses ₹3 lakh crore

The latest rally in Sun Pharma's shares has been triggered by multiple positive newsflow. Last week, China's National Reimbursement Drug List had included Sun Pharma drug Ilumetri used to treat adults with moderate to severe Plaque Psoriasis in Category B.

Ilumetri received marketing approval in China in May 2023. The inclusion in the national reimbursement drug list is expected to enhance accessibility and affordability, benefiting a broader patient population.

Brokerage firm Bernstein believes that this news is incrementally positive for Sun Pharma, and that it opens up another large psoriasis market for the company. It has an outperform rating on Sun Pharma with a price target of ₹1,208.

Further, the company also signed licensing agreement with Aclaris for immune-inflammatory disease.

JPMorgan believes that Sun Pharma is best placed to transition into a specialty player in the US with large investments already in place. The company's specialty business contributed 16% to its financial year 2023 revenue and is likely to rise further aided by a ramp-up in its key products like Ilumya, Cequa and Winlevi.

“We see a structural improvement in Sun Pharma’s margin profile over the medium term with improved quality of earnings (less generics exposure, high specialty contribution), observed JPMorgan in an investor note last month.

Additionally, the company also launched 8 new products in Q2 including Tyvalzi, which is a first-in-class drug for the treatment of ischemic stroke. Moreover, the street believes Sun Pharma’s strong balance sheet provides flexibility to pursue inorganic growth opportunities which can act as an additional lever for growth.

Shares of Sun Pharma are trading 1.7% higher at ₹1,256.55.