 "Sun Pharma")
India’s biggest pharmaceutical company, Sun Pharmaceutical is scheduled to release its quarter four earnings for the financial year 2023-24 (Q4FY24) on Wednesday, May 22, 2024.
Sun Pharma is set to see a strong financial earnings on a year-on-year (Y-o-Y) basis for Q4FY24, showing a 8-14 per cent Y-o-Y jump in its topline, registering revenues in the range of Rs 11,858 crore and Rs 12,472 crore, according to brokerage estimates. The company recorded a revenue of Rs 10,930 crore in the Q4FY23.
According to brokerage firms, this growth is powered by higher contributions from the generic multiple myeloma drug Revlimid and specialty products in the US.
The pharma major’s profit after tax (PAT) is set to jump by 8-41 per cent Y-o-Y in the range of Rs 2,161 crore to Rs 2,800 crore in Q4FY24, while the PAT could lag by -14 to 6 per cent quarter on quarter (Q-o-Q) compared to the third quarter of FY24. The company had posted a net profit of Rs 2,523 crore in Q3FY24 and Rs 1,984 crore in Q4FY23.
Here’s what brokerages expect from Sun Pharmaceuticals
Nomura: The brokerage believes Sun Pharma’s India formulation is likely to grow ahead of the broader market.
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With its US sales estimated at $533 million in 4QFY24, up from $56 million Y-o-Y, primarily due to higher contribution from Revlimid.
The brokerage bakes in an increase in other expenses Q-o-Q, in line with previous years and higher R&D spending.
“For FY24F, we forecast the company to deliver 11.9 per cent revenue growth y-o-y vs company guidance of high-single-digit growth. The company may guide for low-teen revenue growth in FY25, in our view,” Nomura said in a report.
ShareKhan: It expects sales growth expected from Revlimid, specialty products in the US market and uptick in the domestic market.
According to the brokerage, Sun Pharma’s India sales are expected to grow at 12 per cent due to volume growth. While overall it can clock 14 per cent growth in sales due to higher traction in the specialty sales.
Margins expected to rise due to strong traction in the specialty portfolio with healthy operations and lower finance cost to lead to better profitability.
Prabhudas Lilladher: Analysts at the brokerage believe that the company is likely to report EBITDA growth of 9 per cent Y-o-Y and a revenue growth of 8 per cent Y-o-Y.
Specialty product portfolio and domestic business to deliver growth YoY.
It further expects steady sales from Revlimid QoQ. Domestic formulation business to show double digit growth YoY.
“Over the last few years SUNP dependency on US generics has reduced and the company's growth is more functional on US specialty, RoW and domestic pharma business that continues to show strong growth visibility. Maintain ‘BUY’ rating on the stock at TP Rs 1,640,” analysts at Prabhudas Lilladher wrote in a report.
Outlook on overheads and margins will be key monitorables.
Antique Stock Broking: Pick up in Ciprodex, specialty business and contribution from Revlimid to aid the quarter over 3Q which was benefited by $20 million milestone income.
Key things to look for the brokerage are specialty business margins and commentary on complex generics.
JM Financials: Analysts at JM Financials expect strong specialty sales of $284 million. They bake in $30 million from Revlimid and sequential improvement in US generics with Mohali supply resumption.
Sun Pharma’s quarter four IQVIA growth is trending above IPM growth on account of lower anti-diabetic drag and Istamet base reset. Sun Pharma’s specialty can potentially deliver positive earnings surprises, analysts said.
Yes Securities: It bakes in domestic growth of 10 per cent Y-o-Y and expects steady up move in US specialty business with sustained momentum in Taro. ROW had a $20 million payment from Almirall in Q3 which would be presumably absent in Q4, the brokerage said.
