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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 Wyeths 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 FY13Q2 FY12% yoyQ1 FY13% qoq
Operating Income26,57218,94640.326,581(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 profit11,6857,84049.012,169(4.0)
OPM (%)44.041.38259 bps45.78(180 )bps
Depreciation(829)(668)24.2(801)3.4
Interest income(283)(56)408.3(212)33.2
Other income1,7581,23842.0(19)(9,402.6)
PBT12,3328,35547.611,13610.7
Tax(2,139)(1,281)67.0(1,924)11.2
Effective tax rate (%)17.315.3201 bps177 bps
PAT4,3577,074(38.4)9,212(52.7)
Min Interest & other Adj1,1611,0975.81,256(7.5)
Exceptional Item(5,836)----
Reported PAT3,1965,977(46.5)7,956(59.8)
Adj PAT9,0325,97751.17,95613.5
PAT margin (%)34.031.55244 bps29.9406 bps
Ann. EPS (Rs)34.723.151.130.713.5
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.Q2FY13Q2FY12% yoyQ1FY13% qoq
India Formulations8,0997,04614.95,87737.8
US Formulations13,3017,99166.515,411(13.7)
ROW Formulations3,7262,56745.13,6661.6
Export Formulation17,02710,55861.319,077(10.7)
Total Formulations25,12517,60442.724,9540.7
Bulk1,7581,6039.62,020(13.0)
Others12542,933.1








 

 
 
 
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