Sun Pharmaceutical Industries has recorded a 5 percent on-year growth in consolidated profit of Rs 2,166 crore for the quarter ended December 31, 2022, as against Rs 2,059 crore a year back. Net profit was down 4 percent against Rs 2,262 crore reported in the September quarter.
Consolidated revenue from operations for the Indian pharma major came in 14 percent higher at Rs 11,241 crore, compared to Rs 9,863 crore in the December 2021 quarter. Revenue in Q2FY23 stood at Rs 10,952 crore.
Earnings before interest, depreciation, tax, and amortisation (EBITDA) came in at Rs 3,004 crore, 15 percent higher from Rs 2,606 crore reported last year. EBITDA margin widened by 30 bps to 26.7 percent on a yearly basis as against 26.4 percent a year ago.
"Specialty is expected to continue as a key growth driver for Sun. We are investing to scale up this business, especially in our core therapy areas. Proposed Concert acquisition is a step forward in this direction. Concert’s lead asset, deuroxolitinib has a potential best-in-class profile in Alopecia Areata, an area of dermatology with high unmet need. We are excited to offer this new treatment option to dematologists worldwide. Given our commercial strength, we would be well-positioned to bring this product to market," said Dilip Shanghvi, MD, Sun Pharmaceutical.
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Here's what brokerages have to say about the stock post its Q3 earnings:
Morgan Stanley
The global brokerage firm has an 'overweight' rating with target at Rs 1,150 per share. It is of the view that well-diversified business is helping manage volatility and yet show steady growth.
Global specialty business has a long growth runway with current portfolio. "Deuroxo should further strengthen it while FCF generation continues, strengthening the balance sheet," the research firm said.
Jefferies
Jefferies, on the other hand, has a 'buy' rating with target at Rs 1,200 per share. The research firm believes that the Q3 results were in-line operationally, while lower tax rate resulted in PAT beat.
"Strong performance in emerging markets offset slightly weak India growth. Specialty pipeline ramp-up remains strong with proposed acquisition of Concert," it said.
Prabhudas Liladhar
Domestic research firm Prabhudas Liladhar has reduced FY24/FY25 earnings estimates by 5 percent/2 percent after factoring in import alert at Halol unit along with higher overheads.
"Sun Pharma Q3 FY23 EBIDTA adjusted for one-time milestone income was 5 percent below our estimate. Overall specialty sales, GMs continue to remain healthy while other expenses remain elevated on back of higher SG&A and R&D spends. Over the last few years, the firm's dependence on US generics has reduced and the company’s growth is more functional on specialty, RoW and domestic pharma business that has strong growth visibility. Further, acquisition of Concert Pharma provides visibility to the company's specialty pipeline beyond FY25," it said.
"We maintain ‘buy’ rating at target of Rs 1175 based on 26x December 2024 earnings. Sun Pharma remains our top pick in large cap space," it said.
With agency inputs
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