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Sun Pharma (Q2 FY13)

India Infoline News Service | Mumbai | November 15, 2012 14:57 IST

Sun Pharma (Q2 FY13)

CMP Rs697, Target Rs715, Upside 2.6%

  • Revenue growth of 40% yoy and flat qoq to Rs26.5bn was 6% better than our estimates

  • The growth was primarily led by better than expected growth in its US subsidiary, continued benefit from Doxil in US and higher realisation

  • Domestic market adjusting for higher sales last year grew by 19% yoy to Rs8.1bn

  • US Formulation clocked in strong revenue growth of 67% yoy to Rs15.3bn (largely led by Doxil sales); US$ revenue growth at 38% yoy

  • EBIDTA margin at 44%, 260 bps improvement yoy is again led largely by Taro performance, one-off and better realization of Rupee

  • In line with sales, Adjusted PAT accelerated by 51% to Rs9bn

  • Reported PAT was down 46% yoy on account of one-time provision of Rs5.9bn (~10% of Wyeth’s claim of US$960mn for Protonix)

  • The company announced the acquisition of DUSA Pharmaceuticals (listed at NASDAQ) for a cash consideration of US$230mn

  • We keep scope of revising our estimates after DUSA consolidation. However, at present we maintain our rating to MP on the back of limited upside led by stretched valuations

Result table
(Rs mn) Q2 FY13 Q2 FY12 % yoy Q1 FY13 % qoq
Operating Income 26,572 18,946 40.3 26,581 (0.0)
Inc/(dec) in stock (1,043) (1,163) (10.3) (852) 22.4
Consumption of Materials (4,872) (4,367) 11.6 (4,978) (2.1)
Purchase of Traded Goods (1,057) (435) 142.9 (897) 17.8
Employees' Cost (3,568) (2,727) 30.8 (3,512) 1.6
Other Expenditure (6,434) (4,740) 35.7 (5,878) 9.5
Operating profit 11,685 7,840 49.0 12,169 (4.0)
OPM (%) 44.0 41.38 259 bps 45.78 (180 )bps
Depreciation (829) (668) 24.2 (801) 3.4
Interest income (283) (56) 408.3 (212) 33.2
Other income 1,758 1,238 42.0 (19) (9,402.6)
PBT 12,332 8,355 47.6 11,136 10.7
Tax (2,139) (1,281) 67.0 (1,924) 11.2
Effective tax rate (%) 17.3 15.3 201 bps 17 7 bps
PAT 4,357 7,074 (38.4) 9,212 (52.7)
Min Interest & other Adj 1,161 1,097 5.8 1,256 (7.5)
Exceptional Item (5,836) - - - -
Reported PAT 3,196 5,977 (46.5) 7,956 (59.8)
Adj PAT 9,032 5,977 51.1 7,956 13.5
PAT margin (%) 34.0 31.55 244 bps 29.9 406 bps
Ann. EPS (Rs) 34.7 23.1 51.1 30.7 13.5
Source: Company, India Infoline Research

Revenue growth of 40% yoy and flat qoq at Rs26.5bn was 6% better than our estimates

Revenue growth of 40% yoy to Rs26.5bn was largely in line with our estimates. The growth in revenues is primarily led by higher than expected growth in its US subsidiary (Taro), one-off like cancer drug Doxil in US and forex impact. Adjusted Domestic growth moderated to 19% yoy (adjusted for pre-booked sales of last year). US revenue declined by ~US$40mn qoq, largely on account of moderation in Lipodox (generic doxil) sales in Q2FY13.  International formulation sale at US$68mn grew by 21% yoy (in $ terms).  Formulation sales in rest of the world markets outside of India and US grew by 21% yoy to US$ 68mn in Q2FY13.  In RoW, excluding US Taro sales, underlying sales growth in $ terms was 34% for the Q2 FY13 and 40% for H1FY13. API business which is largely for captive purpose, also, continues to grow.  External sales of API reached Rs1.8bn in Q2FY13 registering a growth of 10% yoy. 


Revenue Break-up
Rsmn. Q2FY13 Q2FY12 % yoy Q1FY13 % qoq
India Formulations 8,099 7,046 14.9 5,877 37.8
US Formulations 13,301 7,991 66.5 15,411 (13.7)
ROW Formulations 3,726 2,567 45.1 3,666 1.6
Export Formulation 17,027 10,558 61.3 19,077 (10.7)
Total Formulations 25,125 17,604 42.7 24,954 0.7
Bulk 1,758 1,603 9.6 2,020 (13.0)
Others 125 4 2,933.1








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Sun Pharma (Q2 FY13)
Sun Pharma (Q2 FY13)
Sun Pharma (Q2 FY13)
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