Q3FY23 Preview: Sun Pharmaceutical Industries: Revenue seen at Rs110,520 million, PAT at Rs22,004 million

30 Jan 2023 , 10:09 AM

Result date: 31^st January, 2023

Recommendation: Buy

Target price: Rs1,170

Continued momentum in Specialty business (Winlevi, Illmya and Cequa) could aid December 2022 quarter performance of Sun Pharmaceutical Industries (Sun Pharma). The US generics business (excluding Taro) could perform well amid new launches and robust volumes in key products. Taro, on the other hand, could remain weak owing to high competitive intensity, price erosion and absence of significant launches. Revenue of domestic business could grow in low-single digits, on the back of all-round growth across segments. Consequently, revenue growth is estimated at 13% as compared to the year-ago quarter.

Sun Pharma is expected to maintain EBITDA margin at 26% levels despite higher spends towards R&D.

Profit After Tax or PAT of the company could grow 7% over the year-ago quarter.

Important management insights to watch out for:

• Update on patient recruitment for additional indication related to Illumya, g-Revlimid/g-Asacol approval
• Outlook for the specialty portfolio given COVID-led volatility

	December 2022 estimates	YoY change	QoQ change
Revenue (Rs mn)	110,520	13%	2%
EBITDA (Rs mn)	29,288	14%	(4)%
EBITDA margin	26.2%	33 bps	(176) bps
Profit After Tax (Rs mn)	22,004	7%	(3)%

Source: IIFL Research