Pick of July 2023: Sun Pharma shares is a hot pick; here’s why brokerages recommends to accumulate
Indian markets are expected to be driven by Q1 FY24 earnings and global trends in July. Brokerages recommend accumulating Sun Pharma stock citing positive technical indicators and strong performance in FY23. Sun Pharma’s stock has potential upside of 8-12%.
After rising over 3.5%, Sensex and Nifty 50 will begin the first trading week for July month from Monday onward. Indian market is seen to have favorable domestic cues with macros steadily improving and expectations of GDP and corporate earnings growth to better ahead. In July, markets will be heavily driven by the first-quarter earnings of FY24 apart from global trends. Amidst this, brokerages have recommended accumulating one pharma stock.
While Religare Broking has picked drugmaker Sun Pharma as the pick of the month, Emkay Global adds this stock in its technical picks in the pharma sector.
Last week, on Friday, Sun Pharma’s share price closed at ₹1,051.40 apiece, up by ₹29 or 2.84% on BSE.
Sun Pharma’s stock is currently closer to its 52-week high of ₹1,071.90 apiece.
In June 2023, Sun Pharma stock climbed by ₹42.25 or 4.19% — outperforming Sensex and Nifty 50 which gained by 3.47% and 3.53% respectively.
So far, in 2023, Sun Pharma’s shares soared by more than 5%. But in a year, the upside is stellar by nearly 27% on BSE.
In its technical view, Religare Broking on Sun Pharma, said, “We have witnessed a trend reversal in the pharma index after more than one and a half years and trading up by over 8% this month so far.”
The brokerage is seeing noticeable traction across the pack wherein Sunpharma also looks set to resume the trend after spending nearly seven months in a consolidation range.
Hence, the brokerage suggested that traders shouldn’t miss the opportunity and accumulate in the given range.
Accordingly, the brokerage has set a target price of ₹1,180 apiece with a stop loss of ₹980 apiece. The buying initiation range is set between ₹1,040- ₹1,050.
Meanwhile, Also, Emkay Global has set a target price of ₹1,080/1,140 on Sun Pharma with a stop loss of ₹940.
Emkay’s note said, “Sunpharma has been a consistent performer when the broader pharma sector was not in the movement. Stock had found its feet at the horizontal support line after a 15% correction in the price. Recent bottom coincides with a rising moving average (purple color). A breach of a tiny falling trendline indicates a bullish continuation sign.”
With that, Sun Pharma stock has a potential upside in the range of 8% to over 12% against the current market price level.
In FY23, Sun Pharma reported a net profit of ₹8,473.6 crore, more than doubled from ₹3,272.7 crore in FY22. Gross sales stood at ₹43,278.9 crore, rising by 12.6% YoY. On the domestic front, the company’s India formulation sales stood at ₹13,603.1 crore, up 6.6% over the same period last year.
Sun Pharma is the world’s fourth-largest specialty generic pharmaceutical company and India’s top pharmaceutical company. A vertically integrated business and a skilled team enable it to deliver high-quality products, trusted by customers and patients in over 100 countries across the world, at affordable prices.
As of June 30, 2023, Sun Pharma’s market value stood at more than ₹2.52 lakh crore.hile
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