We reduce our sales estimates by 25%/29%/28% and PAT estimates by 61%/35%/28% for FY18/19/20 to factor (1) demerger of commodity API business, (2) lower than expected operating margin in3QFY18, and (3) delay in procurement with respect to institutional business.There is a risk of increased price erosion in recently-launched molecules;however pipeline remains robust for better growth, subject to approval. We value STR on sum-of-the-parts (SOTP), valuing the p harma business at 18x12M forward earnings (industry average P/E multiple for midcap pharma)and Solara at an EV of 8x (from 12x earlier to factor commodity nature of API business) FY19E EBITDA to arrive at a price target of INR989. Reiterate Buy