Looking at the chart, technically Sun Pharma (CMP: 952) has immediate support of around 926-916 followed by 900-860 zone. Consecutive closing below 860, it could fall to 838-800 area in the near term.
On the upside, Sun Pharma has to sustain above 978-1005 for an immediate target of 1033, followed by 1072 zone. Sustain above 1072, it may again scale to 1121 & 1200 area in the short to medium term. Only a consecutive closing above 1200, it may target 1252 & 1350-1400 territory (FY:17).
Bottom line : Technical Trading Levels
800-838-860-900-916-926-953-978-1005-1033-1072-1121-1200
Yesterday's entire stake sale (around 9% in Sun Pharma) by Daiichi at an average price of around 949 gave an exit route for it at break even in rupee terms for the entire amount it invested for acquiring on Ranbaxy. Overall, it is proved to be bad investment for Daiichi, which was done hurriedly and might be without through due diligence as they were scrambling for a "Copy Cat" pharma marketeer having presence in several countries (as some of their own researched molecules are near patent expiring).
But going ahead, Daiichi's exit may be good for Sun Pharma as it provides better synergy between Sun & Ranbaxy. The merged entity is now India's largest & world's fifth largest pharma company.
But, Sun Pharma management's (Shanghvi Family) increasing diversification in non-core business, although by personal capacity may not be greatly appreciated by the market in long run.
For Daiichi's sorry state of saga with Ranbaxy, it again proved that Japanese robotic brains are far behind than Singh's IQ and going ahead, any foreign company may think twice before investing in large M&A in India. We also need to clear the present MAT (FII) fiasco issue before its too late & too little. Simply, Indian market can't afford to tail FII(s), as we have no retail base at all.
For NF, 8364-8328 is a strong technical support area & sustain below that may lead us to 8268-8208-8160-8110-8000 zone easily, unless FII(s) think other wise. Govt hint to legal interfere (ultimately SC), may help FII(s) and market in this regard.
As par BG metrics of TF model, median valuation of Sun Pharma is around 900 (as par current TTM EPS of around 25). But if we assume, projected FWD EPS of around 36 (FY:17), median value may be near 1100 under the current market conditions.
| SCRIP | EPS(TTM) | BV(Act) | P/E(AVG) | LONG TERM | SHORT TERM | MEDIAN VALUE | 200-DEMA | 10-DEMA |
| SUNPHARMA | 24.83 | 89.44 | 33.42 | 849.58 | 941.02 | 895.30 | 869.82 | 1067.13 |
| SUNPHARMA | 29.8 | 95 | 33.42 | 930.74 | 1030.91 | 980.82 | 869.82 | 1067.13 |
| SUNPHARMA | 35.68 | 100 | 33.42 | 1018.43 | 1128.04 | 1073.23 | 869.82 | 1067.13 |
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