Sun Pharmaceutical Industries is likely to report muted operating performance and earnings with 4 percent decline in the on-year consolidated net profit for the quarter ended September 2022.
A Moneycontrol poll of six brokerage houses has pegged the consolidated post-tax profit for the country's largest pharmaceutical company by sales volume at Rs 1,968.4 crore. The company will report its September quarter earnings on November 1.
The decline in bottomline performance may have been caused by a tepid operating performance in the reporting quarter with growth in consolidated operating profit for the quarter estimated at a mere 0.5 percent on-year to Rs 2,719.9 crore.
The operating performance is impacted by higher spending on research and development, rise in general costs and ongoing price erosion in the US base business of the company, analysts said.
Sun Pharmaceutical’s consolidated revenues, however, are expected to rise 13.2 percent on a year-on-year basis to Rs 10,893.8 crore in the September quarter aided by growth in US specialty products and domestic formulations portfolio.
Brokerage firm Motilal Oswal Financial Services expects sales in the US to rise 21 percent on a year-on-year basis to $426 million aided by strong execution in the specialty products portfolio.
At the same time analysts estimates for growth in the domestic formulations business range from 8-14 percent on-year for the September quarter given the low share of Covid-19 treatment drugs in the year-ago quarter for the company.
Sun Pharma’s consolidated operating margins in the quarter are expected to shrink sharply reflecting the high price erosion in the US generic drugs portfolio and the weak showing of subsidiary Taro Pharmaceutical. Consolidated operating margin is likely to contract 314 basis points on-year to 24.98 percent.
Besides the September quarter earnings, investors will keenly await the management’s commentary on the US specialty drugs portfolio. “Commentary on Winlevi's progress is a key monitorable given secondary sales data suggests muted prescription growth for the molecule over the past few months,” Kotak Institutional Equities said in a preview note.
At 1:10 pm, shares of Sun Pharmaceutical were up 3 percent at Rs 1,020 on the National Stock Exchange.
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