Indian pharma major Sun Pharma's June quarter numbers are expected to be subdued due to high base effect and weak domestic business because of COVID-19.
Sun Pharma will release its June quarter scorecard on July 31.
Global brokerage firm Phillip Capital expects Sun Pharma's sales to remain muted due to the high base of last year and underperformance in domestic business because of COVID.
"Led by a high base of last year in the US, margins may contract by 120 bp, resulting in flat EBITDA. PAT may see a 10 percent decline mainly due to base effect," Phillip Capital said.
Phillip Capital expects Sun Pharma's revenue to see a 1 percent year-on-year (YoY) decline and a 4.4 percent YoY decline in EBITDA.
Brokerages believe besides the number, outlook on global specialty business and prescription trends in specialty portfolio will be in the focus of investors.
Brokerage firm Motilal Oswal Financial Services expects Sun Pharma's US sales to come in at $386 million, down 9 percent YoY due to one-time opportunity in Q1FY20.
The high base of the last year in the US and COVID-19 impact on branded generics may keep Sun Pharma's sales flat on YoY basis, Motilal Oswal believes.
As per the estimates of Motilal Oswal, the Q1 results may come out softer.
Motilal Oswal expects a 29.7 percent YoY fall in Q1 adjusted net profit while net revenue may slip by 0.6 percent YoY. EBITDA is likely to see a 14.9 percent YoY decline.
On the other hand, Kotak Institutional Equities expects Sun Pharma's EBITDA margins at 18.4 percent (flat QoQ), given adverse operating leverage with consolidated revenues declining nearly 3 percent.
Kotak expects a 3.2 percent YoY drop in net sales, 25.1 percent YoY fall in EBITDA and 540 bps YoY fall in EBITDA margin.
Adjusted PAT, as per Kotak, may fall 49.1 percent YoY.
Emkay Global sees a 7 percent YoY fall in Q1 net sales and a 60 percent YoY fall in PAT. EBITDA, as per Emkay, may drop 34 percent YoY which will lead to a 690 bps YoY fall in EBITDA margin.
"US should decline led by a hit on the specialty portfolio and Taro sales (derma concentration). India sales should be relatively better than peers and decline only marginally due to a higher Chronic portfolio. Margins should be flat QoQ as Q4 base had employee provision in a subsidiary and Rs 140 crore forex loss," said Emkay Global.Disclaimer: The above report is compiled from information available on public platforms. Moneycontrol advises users to check with certified experts before taking any investment decisions.