On the back of the FDA’s product seizures at Sun’s US subsidiary, Caraco on June
25th, Analysts across the street have lowered revenue and earnings estimates by 8-10% across FY2010E-2012E to reflect the impact on Sun’s US sales. As a consequence of declining earnings (19% decline in FY10 vs. FY09) and lowered returns in FY10, Goldman’s Returns-based TP is reduced by 18% to Rs947 and we downgrade the stock to a Sell with a potential downside of 17%.
I am a little concerned on why only Indian pharmacy companies are being targeted in the US ? Any pointers ?