Revenue growth of 62% yoy and 14% qoq at Rs26.5bn; higher than our expectations (constant currency growth of 34% is largely in line with estimates)
Higher than expected growth was primarily led by better than expected growth in its US subsidiary, one-off like cancer drug Doxil in US and higher $ realisation
Domestic market adjusting for one-off of last year grew by 20% yoy to Rs5.9bn
US Formulation clocked in strong revenue growth of 147% yoy and 52.5% qoq to Rs15.4bn (105% yoy growth in constant currency basis)
EBIDTA margin at 45.8% is far above our expectation which is largely driven by Taro performance, business mix and better realization of Rupee
In line with sales, PAT accelerated by 63% largely on account of improved margin
We revise our rating to MP from Buy on the back of limited upside and revise our 9-month target price to Rs715.
|(Rs m)||Q1FY13||Q1FY12||% yoy||Q4FY12||% qoq|
|Inc/(dec) in stock||(852)||(866)||(1.6)||(1,073)||(20.6)|
|Consumption of Materials||(4,978)||(4,511)||10.4||(4,960)||0.4|
|Pur of Traded Goods||(897)||(426)||110.5||(1,022)||(12.2)|
|OPM (%)||45.8||33.47||1231 bps||41.05||473 bps|
|Effective tax rate (%)||17.3||2.5||-||16||92 bps|
|Minority Interest & other Adj||1,256||643||95.2||841||49.3|
|PAT margin (%)||29.9||30.63||(70) bps||35.2||(527) bps|
|Ann. EPS (Rs)||31||19.4||58.8||32||(3.0)|
Sun Pharma reported revenue growth of 62% yoy and 14% qoq at Rs26.5bn; higher than our expectations (constant currency growth of 34% is largely in line with estimates)
Sun Pharma reported 62% growth in sales to Rs26.5bn in Q1 FY13, is far ahead of our expectation. Higher than expected 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. At constant dollars the growth is at 34% yoy, which is largely in line with our estimates.
Domestic market adjusting for one-off in last year grew by 20% yoy to Rs5.9bn
The company reported de-growth of 8% to Rs5.9bn in domestic sales in Q1 FY13. Excluding the impact of the nonrecurring sales, growth in the core business was 20% yoy. Sun has maintained its legacy in domestic market by growing well above ~16% growth in overall domestic pharmaceutical market.
|Sales Breakup (Rs mn)||Q1FY13||Q1FY12||% yoy||Q4FY12||% qoq|
|Total Export Formulation||19,077||8,741||118.3||13,332||43.1|
|As a % of net sales||Q1FY13||Q1FY12||% yoy||Q4FY12||% qoq|
US Formulation clocked in strong revenue growth of 147% yoy and 52.5% qoq to Rs15.4bn (105% yoy growth in constant currency basis
The US Sales of finished dosage products recorded strong revenue growth of 147% yoy to Rs15.4bn. Sales in the US is US$285mn, up by 105% where sales of Caraco increased by 185% yoy and Taro posted revenue growth of 43% yoy to US$159mn.
The growth was led by better than expected growth in its US subsidiary, Taro and one-offs like cancer drug Doxil. In response to the critical shortage of the cancer drug Doxil, doxorubicin hydrochloride liposome injection, USFDA took proactive steps needed to increase available supply for patients in the US. US FDA allowed Sun Pharma to sell the product (sourcing type of arrangement). It’s a onetime but the effect was there in last and even this quarter as well. The company is not sure till what time it would be selling the product under this agreement. We expect core growth momentum in US will continue with new niche product launches and gaining market share in existing products. Positive trigger would be US FDA clearance of its Caraco facility in Detroit where remediation efforts are still ongoing.
EBIDTA margin at 45.8% is far above our expectation which is largely driven by Taro performance, business mix, one-offs and better realization of Rupee
Sun Pharma recorded an OPM of 45.8% Advertisements