DSP ML sees Sun Pharma's Jul-Sep net at Rs 171.1cr

Broking house, DSP Merrill Lynch expects that Sun Pharma is to post net profit of Rs 171.1 crore (Rs 1.71 billion), down 3.2% and net sales of Rs 506.5 crore (Rs 5.06 billion), down 5.3% in the quarter ended July-September, 2006, QoQ.

Outlook on Healthcare Sector

Their report says, “We expect sector performance for the quarter to be strongest for the generic players – Ranbaxy (903% YoY PAT growth), Reddy’s (107% YoY PAT growth), Cipla (48% YoY PAT growth). We expect average sales growth of 42% YoY, EBITDA growth of 109% YoY and PAT growth of 99% YoY.”

“We expect mid to high double digit domestic market growth (YoY basis) for most players during the quarter. This improvement is already being witnessed in the 18.9% industry growth for YTD’06 as reported by ORG.”

Their report further says, “The major companies - Ranbaxy, Reddy’s and Cipla - will likely benefit from one/all of the three generic drugs launched during late 1Q. Reddy’s had captured 24% market share in generic Zocor (cholesterol 5.10, 20,40mg strength) while Ranbaxy has 54% share (80mg strength) so far. In generic Proscar (BPH), Teva’s 64% share (2nd week) will benefit Cipla (API supplier) while Reddy’s share is 21.6%.”

“Sun Pharmaceuticals will likely deliver 16% PAT growth for the quarter driven by 14% growth in revenues and maintenance of high OPM due to limited competition in generic Ultracet and income from FCCB proceeds.”