Edelweiss Securities has maintained 'Buy' on Sun Pharmaceutical Industries with target price of Rs 680 as against current market price (CMP) of Rs 611 in its report.

Commenting on the investment rationale, the stock broker said, ''Sun Pharma Q4FY14 results were in-line with revenue growth of 32% led by robust growth in India (up 22%) while US sales (excluding Taro) grew marginally QoQ. ROW grew at moderate pace of 9% and was lower- than our estimate. EBITDA margins of 44.4%, in-line, declined by 200bps QoQ due to lower margin in Taro (55% versus 63% in Q3FY14), while base business margins excluding Taro expanded 140bps QoQ.

We believe that management guidance of 13-15% revenue growth in FY15 on a high base of FY14 is encouraging. However, risk of competition and price decline in key products (Doxil, Doxycycline, Taro's portfolio) in the near term would lead to a muted 11% earnings growth. We remain positive on Sun as we believe likely synergies from Ranbaxy will drive long term value creation.

We expect near term risk from competition and price decline in key products including Taro's portfolio, however Ranbaxy integration and synergies benefit would be long term detriments of valuations. We remain positive on SUNP's track record with turning around distressed assets and maintain 'Buy' rating on the stock.''

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