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* SUNP has been investing significantly for building US specialty franchise. Further, on the back of successful US FDA clearance for Halol facility, strong track record of transforming the acquired assets, we see multiple growth drivers for the Company.
* We are expecting strong traction in US business to continue led by new launches and ramp-up in recently launched specialty products along with healthy recovery India business from FY20E onwards.
* In specialty segment, SUNP has already launched key products i.e. Ilumya, Yonsa and Xelpros in the US and expected to launch Cequa in 1QFY20E. We see specialty business is the key growth driver for SUNP, going ahead.
* SUNP has reported good performance in 3QFY19 led by healthy growth in the US business. We expect SUNP’s overall sales/ earnings to clock 13%/30% CAGR over FY18-21E, while EBITDA margin is expected to expand by 433bps to 25.5%.
* We have a fundamental BUY recommendation on the stock with a Target Price of Rs535.
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