Sun Pharma reported a good set of numbers for Q1FY20. Consolidated revenue grew by 15.7% yoy and 17.2% qoq to Rs 8,259cr against median consensus estimates of Rs8,162cr. EBITDA came in at Rs1,996cr, up 24.2% yoy and 96.3% qoq, against consensus estimates of Rs1,772cr. EBITDA margin expanded by 166bps yoy and 973bps qoq to 24.2%. Reported PAT grew by 31.2% yoy to Rs1,387cr against median consensus estimates of Rs1,101cr.
Revenue growth is likely to have been aided by Domestic, RoW and Emerging market revenues; qoq improvement is likely on impact on India business in Q4. Similarly, qoq margins have been aided by India business.
Margins on yoy basis were aided by favourable (gains) foreign currency (~200bps yoy) and lower employee cost (down 142bps yoy, % of sales). On qoq basis, employee cost (-362bps qoq), other expenses (down ~850bps qoq) and forex gain (~160bps qoq) aided EBITDA margin expansion.
Finance cost declined by 58% yoy to Rs57cr and depreciation declined by 13% yoy to Rs136cr.
India sales at Rs2,314cr, up by 8% yoy. For Q1FY20, the company launched 10 new products in the Indian market.
US formulations sales at USD424mn, up by 12% yoy. Growth was aided by a significant business of generic supply to a customer (started from Q4FY19). Taro posted revenue of USD161mn, up 4% yoy.
Emerging Markets sales at USD194mn, was flattish on yoy basis. The growth on yoy basis was impacted by cross currency (posted constant currency growth).
Rest of World (ROW) growth, up 56% yoy (to USD167mn) was aided by consolidation of Pola Pharma (Japan) business.
R&D investments at Rs422cr (5% of sales) compared to Rs500cr (7% of sales) for Q1FY19.
Sun Pharmaceuticals Industries Ltd is currently trading at Rs. 439.15, up by 17.25 points or 4.09% from its previous closing of Rs. 421.90 on the BSE.
The scrip opened at Rs. 422 and has touched a high and low of Rs. 444.80 and Rs. 420.80 respectively. So far 1,41,06,664 (NSE+BSE) shares were traded on the counter. The stock is currently trading below its 200 DMA.
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