Preview of Sun Pharma’s Q2 Results: According to PhillipCapital’s estimates, Sun Pharma is projected to announce a 10% year-on-year increase in sales. Nonetheless, margins might decrease due to a reduced R&D base and charges related to remediation. Consequently, Ebitda is expected to decrease by 4%, and net profit by 3% year-on-year.
Sun Pharmaceutical Industries is anticipated to post robust sales growth in the quarter ending September, thanks to solid contributions from both the US and the domestic formulations markets.
Analysts from PhillipCapital India Research project a 10% increase in revenue for Sun Pharma. This growth can be attributed to the sustained presence of Revlimid generics for the treatment of multiple myeloma in the US, the continued expansion of the US specialty business, and the growth in the domestic formulations market. Despite a somewhat lackluster performance by Taro.
Sun Pharma’s US subsidiary, and the impact of import alerts, analysts from Phillip Capital remain optimistic. Revlimid Generics are expected to contribute approximately $40 million during the quarter, while the US specialty business is predicted to achieve a 19% year-on-year growth. Domestic formulation sales are also expected to maintain their strength with an 8% year-on-year increase.
Sun Pharma has been actively developing and expanding its specialty product portfolio to drive growth in the US market, even in the face of pricing pressures in the generics segment. The US generics segment is currently experiencing stable pricing due to reduced competition caused by drug shortages in the US. This stable pricing environment is expected to persist for several quarters, according to analysts. Additionally, Sun Pharma’s specialty product portfolio is aiding growth in other international markets.
ALSO READ : – As typical onion price in Delhi touches ₹78 per kg, it declines by 4.5% in Maharashtra.
However, the company’s ongoing development and introduction of new products in the Specialty segment are causing R&D expenses to remain high. It’s the increased R&D expenditure and heightened remediation costs that could limit the growth of Sun Pharma’s EBITDA. The manufacturing facilities of Sun Pharma in Halol, Gujarat, and Mohali, Punjab, have encountered regulatory challenges from the US drug regulator. To comply with the good manufacturing practice standards set by the USFDA, Sun Pharma is incurring remediation costs, which are also contributing to the overall expenses. EBITDA, an acronym for earnings before interest, tax, depreciation, and amortization, may experience a 4% year-on-year decrease due to these factors, according to analysts at PhillipCapital.
In the upcoming results, Sun Pharma is anticipated to show a 10% year-on-year growth in sales, as per PhillipCapital’s projections. Nevertheless, it is expected that margins may decrease due to reduced R&D expenses and remediation charges, resulting in a 4% drop in Ebitda and a 3% decrease in net profit year-on-year.
Motilal Oswal Financial Services Ltd (MOFSL) also predicts a decline in Ebitda, from ₹3170 Crore in the previous quarter to approximately ₹3030 crore in the September quarter. However, on a year-on-year basis, Ebitda is projected to be in line with the ₹3050 crore reported in the same period last year.
PhillipCapital’s estimates suggest that Sun Pharma’s net profit is likely to decrease by 3% year-on-year, while MOFSL expects a 4.8% year-on-year decline.
Key factors to monitor include the overall R&D expenditure over the next 12-15 months, as noted by analysts at Motilal Oswal Financial Services (MOFSL). Additionally, the progress of clinical trials related to new indications for Sun Pharma’s product Illumya will be closely observed. Furthermore, the management’s comments on pricing pressures in the US and the introduction of new products will be of interest.
“Exciting news! Nyreadtime is now on twitter Channels 🚀 Subscribe today by clicking the link and stay updated with the latest news insights!” Click here!