Sun Pharma’s revenue in Q3FY19 grew 16.3% yoy to Rs7,740.19cr. EBITDA in Q3FY19 grew 48.1% yoy to Rs2,152.89cr vs. Rs1,453.4cr in Q3FY18 and Rs1,531.2cr in Q2FY19. EBITDA margin in the quarter stood at 27.8% vs. 22.1% in Q2FY19 and 21.8% in Q3FY18. PAT grew 286.2% yoy to Rs1,241.85cr in Q3FY19.
We had expected revenue, EBITDA, and PAT of Rs7,566cr, Rs1,596cr, and Rs1,026cr in Q3FY19, hence, the result has beat our expectations on all fronts. The beat is on the back of quarterly declines in other expenses. Note that PAT for Q3FY18 was adversely impacted by one-time deferred tax adjustment of Rs513cr related to changes in US tax rates. Adjusted for this, net profit growth for Q3FY19 is 49% yoy.
Gross margin declined from 74.7% in Q2FY19 to 72% in Q3FY19; however, on a yoy basis, gross margins have expanded 360bps.
Employee cost as % of sales stood at 19.3% in Q3FY19 vs. 21.2% in Q2FY19 and 20.6% in Q3FY18.
Other expenses as % of sales stood at 24.9% in Q3FY19 vs. 31.4% in Q2FY19 and 26% in Q3FY18.
India sales grew 7% yoy to at Rs2,235cr. The company held ~8.2% market share of the domestic industry.
Q3FY19 EBITDA margin of 27.8% is highest in the past eight quarters.
US finished dosage sales grew 10% yoy to $362mn. Taro posted sales of $176mn, up 13% yoy, in the quarter.
Emerging Markets sales grew 7% yoy to $203mn.
Rest of World sales grew 4% yoy to $125mn.
For Q3FY19, external API sales grew 15% yoy to Rs426cr.
R&D investments for Q3FY19 stood at Rs465cr (6.1% of sales) vs. Rs473cr (7.2% of sales) in Q3FY18.
Sun Pharmaceuticals Industries Ltd share price ended at Rs436.75, up 8.55 points, or 2%, from its previous close of Rs428.20 on the BSE. The scrip opened at Rs428 and touched a high and low of Rs443.95 and Rs424, respectively. A total of 91,23,323 (NSE+BSE) shares were traded on the counter. The stock traded below its 200-DMA.
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