Sun Pharma shares hit 52-week high on acquiring Israeli company

Shares of Sun Pharma surged as much as 0.59% to hit a 52-week high of ₹1,304.10 apiece on the BSE, a day after the company acquired Israel-based Libra Merger Ltd. In contrast to this, the broader BSE Sensex was trading 328.14 points or 0.46% lower at 71,564.34.

The scrip opened higher at ₹1,297.85, as against the previous closing price of ₹1,296.40. At 11:46 pm, the share price of the pharmaceutical major was trading 0.06% lower at ₹1,293.35 in line with the broader BSE Sensex. The company’s market capitalisation in early trade stood at more than ₹3.11 lakh crore with 23,328 shares exchanging hands on the BSE, as against the two-week average of 0.54 lakh shares. The company hit a 52-week low of ₹922.55 on May 22, this year.

In the past one month, three months and one year, the counter has given 5.28%, 13.51%, and 28.44%, in returns, respectively. In the year-to-date period, the counter has given 2.88% in return.

As per the regulatory filing by the pharmaceutical major, through the acquisition, Sun Pharma aims to facilitate the consolidation of business in Israel. Libra Merger Ltd was incorporated on July 18, 2023.  The cost of acquisition has not been disclosed by the company.

Notably, the pharmaceutical major has been on an acquisition spree in the past few months. In December last year, Sun Pharma acquired a 16.7% stake in US-based Lyndra Therapeutics for $30 million. Through this acquisition, the company aims for strategic investment to support the development of innovative pharmaceutical delivery technologies and get access to the technology for certain molecules and territories.

In May last year, the company delivered a letter to the board of directors of Taro Pharmaceutical Industries that contained a non-binding indication of interest to acquire all of the outstanding ordinary shares in Taro, other than any shares already held by the Company or its affiliates, for a purchase price of $38.00 per share, in cash. In December, however, the pharmaceutical major updated the price of acquiring shares at $43 apiece, up from $38 per share. In January last year, Sun Pharma acquired U.S.-based Concert Pharmaceuticals Inc. for $576 million to access the company's experimental drug for treating patchy baldness.

Notably, in the July to September period of FY24, Sun Pharma reported gross sales worth ₹12,003 crore, registering a growth of 11% as against Q2 last year. Its India formulation sales stood at ₹3,842 crore, while the US formulation sales stood at $430 million. EBITDA came out at ₹3,179 crore, up 7.5% vs Q2 last year, while the margin for Q2 was at 26.1% vs 27% for Q2 last year. The company reported net profit worth ₹2,375 crore, up 5% YoY.

The company is yet to announce its financial results for the October to December period of FY24.

Analysts at research firm KR Choksey had earlier said that "the Company continues to outperform average industry growth in India's formulations, increasing the overall market share." "Given the Company's continuous investment in developing a new product pipeline, they will continue to build higher R&D expenses in the near term. We expect 11.0% and 11.8% CAGR growth in its revenue and adjusted net income, respectively, over FY23-FY25E," the research firm said.

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