Sun Pharma Q3 net seen up 25% to Rs 838cr on Taro, Lipodox

Healthcare firm Sun Pharmaceutical is set to announce its third quarter results on Friday. Analysts on an average were expecting profit after tax to grow by 25 percent year-on-year to Rs 838 crore in the quarter, helped by Taro numbers and Lipodox generic.

Revenues are seen going up by 23.3 percent to Rs 2,645 crore from Rs 2,145 crore during the same period. Earnings before interest, tax, depreciation and amortisation (EBITDA) are expected to rise by 19.6 percent YoY to Rs 1,152 crore. However, operating profit margin is seen declining 130 basis points YoY at 43.6 percent in the third quarter. Analysts expect the company to report strong numbers in the October-December quarter on the back TARO numbers, contribution from the Lipodox generic from the US markets and other launches. Also Read - See 20% annual returns from Sun Pharma: IIFL Instl Eq Israel-based Taro Pharmaceutical posted a net profit growth of 42.3 percent year-on-year at USD 88.8 million for the third quarter of financial year 2012-13. Net sales grew by 25.4 percent YoY to USD 185.7 million and operating margin improved by 570 basis points year-on-year to 56 percent in the October-December quarter. Analysts feel Sun Pharma will also consolidate DUSA (the latest US acquisition announced in November) in the third quarter. Hence, numbers will get slight additional boost in December quarter. Sun acquired dermatology company DUSA Pharmaceuticals for USD 230 million in the US. Sun expects this acquisition will add 50-60 million to the topline per annum. However, US could temper down in the third quarter as against September quarter due to tapering off of Lipidox generic. Lipidox generic is expected to contribute around USD 25 million that will be tapered due to re-entry of J&J (the innovator re-entering the market). Sun was allowed to export Lipidox generic on the back of supply shortage to the US. In September quarter, the US markets' sales increased 66.5 percent year-on-year to Rs 1,330 crore due to niche launches like Lipodox (USD 25 million), Stalevo (USD 10 million) and Taro's derma products. According to analysts, India is expected to grow more than 15 percent, which is similar to September quarter. Indian business grew by 15 percent YoY to Rs 810 crore in the second quarter. Even ROW is also expected to continue to grow at same pace. In second quarter, ROW was up 45 percent YoY to Rs 372 crore. For the financial year 2012-13, the management revised its revenue guidance of 15-20 percent to 20-22 percent on constant currency terms. Hence that means a topline of Rs 9,622 crore to Rs 9,783 crore for the year. They have already done revenues of Rs 5,397 crore in the first six months of FY13. Analysts, therefore, expect the company to exceed guidance.