Sun Pharmaceutical Industries Ltd (Sun Pharma) is likely to report a strong 25-30 per cent growth in profit for the March quarter on a 14-17 per cent rise in sales. Integration cost of Concert Pharma could, however, surprise negatively, analysts said.
Sun Pharma is expected to benefit from the steady growth in its global specialty and domestic revenue, partially offset by Halol plant being under import alert, said Sharekhan, as it sees adjusted profit surging 26.7 per cent YoY to Rs 1,967 crore. It sees sales rising 14 per cent to Rs 10,769 crore.
Phillip Capital expects Sun Pharma to log 29 per cent YoY rise in net profit at Rs 1,835.70 crore. Sales are seen rising 15 per cent to Rs 10,905.30 crore. Ebitda margin may come in at 25.6 per cent against 23.1 per cent in the year-ago quarter. This 500 basis points expansion in margins will be seen despite the incremental R&D spend requirement for Concert Pharma post integration during the quarter, Phillip Capital said.
Sun recently acquired Concert Pharmaceuticals for an upfront payment of $576 million, which gives it access to
the late-stage clinical molecule, deuruxolitinib (potential treatment for alopecia areata with no FDA-approved treatments). A possible unknown integration cost of Concert Pharma acquisition could surprise Q4 earnings negatively, Phillip Capital said.
"A 20 per cent growth in US specialty leading to overall 11 per cent rise in US sales of $433 million, along with currency advantage of 9 per cent and steady 5 per cent growth in domestic business would drive 15 per cent sales growth," the brokerage added.
Nirmal Bang Institutional Equities sees profit after tax at Rs 2,046.60 crore. It sees sales rising 15.4 per cent YoY to Rs 11,088.40 crore. Ebitda is seen rising 27 per cent to Rs 2,973 crore, with Ebitda margin seen coming in at 26.8 per cent.
"Revenue is expected to grow 17 epr cent YoY, driven by growth across geographies. US Specialty business is expected to grow at 18.3 per cent YoY, driven by continuous strong growth in Winlevi, Illmya and Cequa.
Growth in the US generics business (ex-Taro) is expected to improve sequentially with re-launches of exempted
products from the Halol plant. Growth in Taro is expected to remain subdued due to increased competition and lack of meaningful launches," it said adding that India business may grow at 8 per cent YoY.
Kotak Institutional Equities expects Sun Pharma to deliver a steady 4QFY23 with 12.5 per cent YoY top line growth, albeit 5 per cent sequential decline due to lower US sales from Halol, impact of seasonality as well some impact of the IT security incident. It is building in $405 million in US sales, down 4 per cent QoQ, due to lower Halol sales and lower specialty sales.
"Ilumya, Winlevi and Odomzo have continued to scale up well in 4QFY23. We build in 8 per cent and 14 per cent YoY growth respectively in India and ROW/EMs in 4QFY23,' i siad.
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