Q4FY22 Preview: Sun Pharmaceutical Industries: Revenues seen at Rs92,861 million, PAT at Rs16,056 million

29 May 2022 , 12:33 PM

Result date: 30^th May, 2022
Recommendation: Add
Target price: Rs940

Sun Pharmaceutical Industries (Sun Pharma) could witness 6% sequential decline in revenue from global specialty business during the March 2022 quarter. This is largely due to a high base effect (due to seasonality factor) of the December 2021 quarter. Loss of market share in Absorica is another pressure point. Although Cequa’s volume growth is facing headwinds, supposedly owing to generic competition in Restasis, Cequa’s IU market share in the dry eye market has been steady at ~3%. Sun’s Winlevi has witnessed a steady traction in prescription volumes with the latest weekly TRx run-rate improving to ~8.1K. This implies an annualized run-rate of ~422,000 TRx, which is materially higher than that of other acne surrogate products such as Onexton, Acanya, Epiduo Forte, and Aczone, which registered ~96,000-370,000 prescriptions in their first year of launch.

The company’s individual products in the specialty business could start attaining EBITDA break-even from FY23 and overall EBITDA margins for this business are estimated at +4-5% in FY23.

The company’ Profit After Tax (PAT) could decline 22% sequentially.

Important management insights to watch out for:
·         New launch pipeline
·         Margin drivers in the future
 

Rs Million	March 2022 estimates	YoY change	QoQ change
Revenue	92,861	10%	(5)%
EBITDA	23,215	16%	(10)%
Profit After Tax	16,056	20%	(22)%

Source: IIFL Research