Sun Pharma EBIDTA likely to improve sharply

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Sun Pharma is to announce its Q4FY07 result. According to CNBC-TV18 estimates, the company is expected to post Q4 net profit of Rs 190.9 crore versus Rs 142.8 crore, up 34% on YoY basis.

The net sales of the company are expected  to go up by 28% at Rs 518.9 crore versus Rs 405.4 crore in the corresponding quarter previous year.

SUN PHARMA

Q4FY07 YoY (consolidated)

- Net sales up 28% at Rs 518.9 Cr vs Rs 405.4 Cr

- Operating profit at Rs 165 Cr vs Rs 96.9 Cr

- OPM at 32% vs 24%

- Net profit up 34% at Rs 190.9 Cr vs Rs 142.8 Cr

SUN PHARMA

FY07 YoY (consolidated)

- Net sales up 26.37% at Rs 2066.8 Cr vs Rs 1635.9 Cr

- Operating profit 38% at Rs690Cr vs Rs497.4Cr

- OPM at 33% vs 29%

- Net profit up 37.9% at Rs 790.50Cr vs Rs572.9Cr

SUN PHARMA

Factor to watch for

-Exports likely to surge due to growth in formulation exports powered by strong sales from its US subsidiary Caraco

-Good growth in domestic sales expected

-EBIDTA margins are expected to improve sharply on account of low base last year, which was impacted by one-time acquisition related expenses

-The progress on integration benefits of acquisition of Able Pharma

-Could make come acquisitions as it has strong cash balance of US $500mn of cash on its balance sheet (However big ticket acquisition is unlikely due to managements reluctance to participate in high-profile bidding wars).

SUN PHARMA

-De-merged R&D entity SPARC (will list soon - listing date not fixed )

-R&D pipeline is valued at US$250m toUS$300m which is Rs 50- 65 per share

-With earliest expected launch in 2009 for one of the NDDS product

-R&D cost as a percentage of sales will come down significantly to the parent Sun Pharma (8% of total sales in FY06)

SUN PHARMA

Sales Break up:

-Domestic formulation 52%

-Domestic bulk drugs 4%

-Export bulk drug 10%

- Export formulation 34%