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Sun Pharma Q3 Preview: Consolidated PAT to gain 10% YoY while revenue to rise 11%

Net sales for the quarter likely to rise 11.5 percent year-on-year growth to Rs 9853 crore for the December quarter

January 30, 2022 / 08:31 PM IST
Analysts are positive on the growth prospect of Sun Pharma's speciality portfolio aided by Winlevi launch despite sectoral headwinds in key markets.

Analysts are positive on the growth prospect of Sun Pharma's speciality portfolio aided by Winlevi launch despite sectoral headwinds in key markets.

 
 
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Sun Pharmaceuticals Industries Ltd is expected to report a 10 percent year- on-year increase in consolidated net profit to Rs 1,957 crore for the quarter ended December 2021, according to an average of estimates from five brokerages polled by Moneycontrol.

Net sales for the quarter likely to rise 11.5 percent year-on-year growth to Rs 9,853 crore for the December quarter, the poll showed.

Taro's sales are expected to grow 6.8% YoY to Rs 1103.6 crores while US (ex-Taro) is likely to grow 4.2% YoY to Rs 1,799.9 crore.  EBITDA margins are expected to decline 73 basis points to 26.5%  due to higher input cost pressures, R&D ramp up and Winlevi cost.

Analysts are positive on the growth prospect of Sun Pharma's speciality portfolio aided by Winlevi launch despite sectoral headwinds in key markets. It’s significant investments (so far it has invested $2 billion in this) and efforts in specialty business have started paying off, as visible in the upward trajectory of revenue. Sustained momentum in specialty will help in improving operating leverage and margins. Domestic formulations (32% of total revenue) continue to outperform the Indian pharmaceutical market, analysts added.

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According to brokerage firm Edelweiss Research US revenue likely to report $370 million up 2% quarter on quarter in constant currency on account of Winlevi launch, good ramp up in Ilumya (65%) and Cequa (8%) growth for Oct and Nov 2021 to offset by decline in Absorica post genericisation and base business price erosion.

Upcoming launches such as gRevlimid and Asacol HD, and Taro recovery should provide comfort to US base business while the solid chronic business and steady emerging markets and rest of the world are likely to aid growth, analysts add.

"We estimate overall top-line growth of ~8% yoy and flat qoq. We expect US specialty revenue of ~US$141mn, driven by US$6mn growth in Ilumya (Rx up 10% qoq) and modest improvement in Cequa, Odomzo, Bromsite, Levulan, and Winlevi, partially offset by declines in Absorica and Absorica LD (Rx down 20% and 10%, respectively). We expect lowdouble digit top-line growth in India and RoW. Taro revenue should remain flat qoq. We expect a significant EBITDA margin compression qoq due to the absence of Covid-related tailwinds, higher input costs and Winlevi launch expenses", Emkay Research said in a note to investors.

Analysts will keep monitoring the commentary on ramp up and EBITDA break outlook in specialty portfolio.



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Moneycontrol Research
first published: Jan 30, 2022 08:19 pm
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