Sun Pharma Q2 PAT seen up 40% YoY to Rs 835 cr

Healthcare firm Sun Pharmaceutical Industries is set to announce its second quarter earnings on Thursday. Analysts on an average expect the numbers to be strong due to consolidation of TARO.

The profit after tax is expected to grow by 40 percent year-on-year to Rs 835 crore in the second quarter of currrent financial year, 40 percent of which contributed by Israel Taro Pharmaceutical Industries.

Revenues are seen going up by 46 percent YoY (of which 30.8% contribution by Taro) to Rs 2,764 crore during the quarter.

Earnings before interest, tax, depreciation and amortisation (EBITDA) are likely to go up by 53 percent to Rs 1,195 crore (36 percent by Taro) in the three months period ended September 2012.

Operating profit margin is expected to improve by 160 basis points YoY to 43 percent in the quarter.

Analyts feel the US business should be boosted by Lipodox generic (Expected contribution of USD 40 million approximately) - cancer drug.

In previous quarter, US sales (Ex-Taro) grew by 185 percent in dollar terms, partly led by strong one-off sales in the US. One-off revenues in US mainly included supply of Doxorubicin under the one-time supply arrangement allowed by the US FDA to bridge shortages.

Domestic business is expected to bounce back in September quarter. The April-June quarter recorded a decline of 8 percent YoY to Rs 587 crore due to one time sales being booked on by the company in Q4FY12 while adjusted growth was 20 percent.

In previous quarter, the management had proposed hiving off the domestic formulations business into a 100% subsidiary to bring in enhanced focus and better response time. Investors should watch out for the same in the quarter.

Export formulations besides the US are expected to grow by 30-35 percent.

Israel subsidiary Taro's sales rose by 16.4 percent YoY to USD 161 million (approximately Rs 853 crore) in the September quarter.

Operating income grew by 33 percent to USD 82.4 million and operating profit margin jumped 640 basis points to 51.2 percent in the quarter.

Net income went up 11 percent to USD 65.4 million (approximately Rs 341 crore) from USD 58.9 million during the same period. Taro recorded foreign exchange loss of USD 1 million as against gain of USD 16.1 million. It has cash in hand at USD 419.2 million as on September 2012.