Sun Pharmaceutical Industries: ICICI Securities Upgrades to ‘Buy’ with Target Price of ₹1,895
Sun Pharmaceutical Industries Limited (Sun Pharma), a global leader in specialty generics, has recently been in the spotlight due to its strategic acquisition and favorable analyst recommendations. ICICI Securities has upgraded its rating on Sun Pharma to ‘Buy’, setting a target price of ₹1,895. This optimistic outlook is underpinned by Sun Pharma’s planned acquisition of Checkpoint Therapeutics and its robust financial health.
Acquisition of Checkpoint Therapeutics
On March 9, 2025, Sun Pharma announced its agreement to acquire Checkpoint Therapeutics, a U.S.-based immunotherapy and targeted oncology company. The deal, valued at approximately $355 million, involves an upfront cash payment of $4.10 per common share, representing a 66% premium over Checkpoint’s last closing price. An additional $0.70 per share is contingent upon achieving specific regulatory milestones in Europe.
Checkpoint Therapeutics has developed UNLOXCYT™ (cosibelimab-ipdl), an FDA-approved treatment for adults with metastatic or locally advanced cutaneous squamous cell carcinoma (cSCC) who are not candidates for curative surgery or radiation. cSCC is the second most common form of skin cancer, with approximately one million new cases diagnosed annually, including 40,000 advanced-stage cases. Integrating UNLOXCYT™ into Sun Pharma’s portfolio is expected to complement existing products like Odomzo in the U.S. and Nidlegy in Europe.
The acquisition is anticipated to close in the second quarter of 2025, pending approval from Checkpoint’s shareholders and other customary closing conditions. Post-acquisition, Sun Pharma will pay royalties of approximately 4.5% of sales to Fortress Biotech, Checkpoint’s majority shareholder, for a defined period.
ICICI Securities’ Upgrade and Financial Outlook
ICICI Securities has revised its stance on Sun Pharma from ‘Hold’ to ‘Buy’, elevating the target price to ₹1,895. This upgrade is attributed to the company’s strategic acquisition and its strong financial metrics. As of the end of the third quarter of fiscal year 2025, Sun Pharma reported a net cash balance of $3 billion, which is expected to fund the Checkpoint acquisition.
The stock has experienced a correction of approximately 10% over the past two months. Currently, it trades at 28 times the estimated earnings for FY26 and 26.4 times for FY27. The enterprise value to EBITDA multiples stand at 20.9x for FY26 and 19.3x for FY27. These valuations, coupled with the company’s growth prospects, make it an attractive investment opportunity.
Sun Pharma’s Financial Ratios
To provide a clearer picture of Sun Pharma’s financial health, here are some key financial ratios:
| Financial Metric | Value |
|---|---|
| Market Capitalization | ₹397,677.78 Crore |
| Price-to-Earnings (P/E) Ratio (TTM) | 32.77 |
| Promoter Holding | 54.48% |
| Book Value per Share | ₹288.06 |
| Return on Capital Employed (ROCE) | 17.2% |
| Return on Equity (ROE) | 16.13% |
| 52-Week High | ₹1,960.35 |
| 52-Week Low | ₹1,377.20 |
Implications for Investors
The acquisition of Checkpoint Therapeutics is a strategic move that aligns with Sun Pharma’s goal to expand its oncology and immunotherapy portfolio. By integrating UNLOXCYT™, Sun Pharma enhances its position in the oncology market, potentially driving future revenue growth. ICICI Securities’ upgraded rating and increased target price reflect confidence in the company’s strategic direction and financial stability.
Investors should consider these developments when evaluating Sun Pharma’s stock. The company’s strong financials, strategic acquisitions, and favorable analyst recommendations position it well for future growth.
Q&A Section
Q1: What recent acquisition has Sun Pharma announced?
A1: Sun Pharma has announced the acquisition of Checkpoint Therapeutics, a U.S.-based immunotherapy and targeted oncology company, for approximately $355 million.
Q2: What is UNLOXCYT™, and why is it significant for Sun Pharma?
A2: UNLOXCYT™ (cosibelimab-ipdl) is an FDA-approved treatment for adults with metastatic or locally advanced cutaneous squamous cell carcinoma (cSCC). Integrating this drug into Sun Pharma’s portfolio enhances its offerings in the oncology sector.
Q3: How has ICICI Securities’ rating for Sun Pharma changed recently?
A3: ICICI Securities has upgraded its rating for Sun Pharma from ‘Hold’ to ‘Buy’ and increased the target price to ₹1,895, reflecting confidence in the company’s strategic direction and financial health.
Q4: What are some key financial metrics of Sun Pharma?
A4: Key financial metrics include a market capitalization of ₹397,677.78 crore, a P/E ratio of 32.77, promoter holding of 54.48%, a book value per share of ₹288.06, ROCE of 17.2%, and ROE of 16.13%.
Q5: How has Sun Pharma’s stock performed recently?
A5: Over the past six months, Sun Pharma’s share price has decreased by 9.74%, and in the last year, it has increased by 4.01%. The 52-week high is ₹1,960.35, and the 52-week
For more market insights, follow our news.
Stay tuned for more updates and insights on the stock market! For more insights on investing in the Indian stock market, check out resource like MoneyControl, ET, NSE India.
Disclaimer: This blog post is for informational purposes only and should not be considered financial advice. Investors should conduct thorough research and consult with a qualified financial advisor before making any investment decisions.