The Sun’s not up for Sun Pharma today!

Sun Pharmaceuticals Ltd, India's biggest drug maker, plunged as much as 15 percent on Tuesday after the company gave a sales and profit warning for FY16 following its purchase of smaller rival Ranbaxy. Sun Pharma was also downgraded by at least two major brokerages.

Sun Pharma's Chairman Dilip Shanghvi told analysts in a conference call, after markets closed on Monday, that sales for the year to March 2016 may be flat to declining as Sun grapples with USFDA's issues on Ranbaxy's major production facilities in Mohali, Dewas, Poanta and Toansa. Sun will be divesting and rationalising its product line in the coming years in a bid to gain back traction, Shanghvi added.

Meanwhile, the stock fell 114 rupees, or 12.2 percent, to 832.75 rupees on the National Stock Exchange with 1.2 shares changing hands in the first 20 minutes of trade compared with a 5-day average of 19 lakh shares. Sun also hit its lowest level since Jan 7th.

Sun's conference call also resulted in a slew of brokerage reports. Among them, Morgan Stanley cut its target to `1,010 from `1,047 while maintaining Overweight stance on Sun Pharma. Morgan cut Sun's FY16 EPS by 13.6%, FY17 EPS by 3.6%and FY18 EPS by 2.5% respectively.

Another brokerage BoFA ML cut its target on Sun Pharma to `950 from `1,063 while maintaining its Neutral stance. It expects Sun's FY16 to be a washed out year but sees a strong recovery in FY18.

All brokerages, however, retain their medium-term bullishness on Sun Pharma.

(Image credits: sunpharma)