Sun Pharma was trading higher for the third straight day, gaining nearly 4 per cent during the period. In past one month, the stock has rallied 13 per cent, as compared to 5 per cent rise in the S&P BSE Sensex.
The pharmaceutical companies are likely to witness a decent quarter amid strong YoY growth in domestic formulations and a stable US portfolio amid favourable currency movement and some key launches. Domestic formulations (select pack) are expected to post robust growth of 12.2 per cent year-on-year (YoY) to Rs 13,513 crore on the back of uptick in volumes of chronic and sub-chronic therapies, full quarter impact of price hikes and benefits from new introductions and field force expansion, analysts at ICICI Securities said in its result preview.
In Q2FY23, Sun Pharma’s revenues are likely to grow around 15.8 per cent YoY to Rs 11,145 crore, mainly on the back of 13 per cent growth in domestic formulations to Rs 3602 crore and around 27 per cent growth in US to Rs 3,411 crore (likely to be driven by specialty and Taro acquisition), the brokerage firm said.
The company’s earnings before interest, taxes, depreciation, and amortization (EBITDA) margins are likely to decline 32 bps to 27 per cent while EBITDA is expected to post growth of 14.4 per cent YoY to Rs 3,009 crore. Adjusted profit after tax is likely to remain flat YoY to Rs 2,051 crore, it added.
Sun Pharma’s growth momentum is to continue from specialty product portfolio. Domestic formulation business will continue to healthy growth of 12 per cent plus. Commentary on margins will be key monitorable, said analysts at Prabhudas Lilladher.
Meanwhile, Sun Pharma’s chairman Dilip Shanghvi, at the Annual General Meeting (AGM) said that the company’s all businesses are positioned for growth, and expect high-single-digit to low-double digit consolidated topline growth for FY23. The ramp-up in global specialty business is expected to continue.
"As business operations normalize globally, overall expenses are expected to increase. Our R&D investments will be about 7-8 per cent of sales in FY23 with increased spending expected on clinical trials for specialty products,” Chairman said.
Sun Pharma will announce its Q2FY23 results on November 01, 2022.
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