Strong Traction in US Business to Continue; Upgrade to BUY Despite Taro's underperformance, Sun Pharmaceutical Industries (SUNP) has reported betterthan-expected performance in 1QFY19, led by healthy US sales (ex-Taro), strong growth in domestic business and lower YoY base. Its sales and EBITDA grew by 16% YoY and 47% YoY, respectively, while PAT surged by 87% on higher other income, strong operating performance and lower tax rate. Despite 215bps YoY contraction in gross margin to 70.8% due to change in product-mix and Taro's higher raw material cost, EBITDA margin expanded by 459bps YoY to 22.2% owing to lower other expenses and R&D; spend. Taro's US sales fell by 4.2% YoY, while ex-Taro US sales grew by 17.5% YoY to US$240mn owing to launch of gWelchol AG, Yoansa and...