Revenues in lines but mixed trend in profitability- significant beat in GPM but EBITDAM missed estimates due to higher than expected other expenses.
Q4FY23 Earnings Summary
Revenues grew 15.7% YoY to Rs 10931 crore (I-Direct estimate Rs11019 crore) driven by continued traction of global specialty business (US$ 244 million) with market share gain in India and growth in Emerging Markets.
US Formulations grew 20.8% YoY to Rs 3534 crore (I-Direct estimate Rs 3542 crore) and the growth driven by specialty portfolio amid demand uptick for Cequa, Ilumya and Winlevi among others. US ex-Taro generics also did well, up 26.2% YoY. Global Specialty sales (ex-milestone) came at US$ 244 million (I-Direct Estimate: US$ 194 million)
India Formulations witnessed YoY growth of 8.7% to Rs 3364 crore (I-Direct estimate Rs 3468 crore) driven by new product launches and increased market share. Ex-Covid growth was 9.8%.
Emerging markets witnessed YoY growth of 17.6% to Rs1820.3 crore (I-Direct estimate Rs 1826 crore)
RoW markets witnessed growth of 17.4% YoY in to Rs1574 crore (I-Direct estimate Rs 1502 crore)
APIs witnessed YoY de-growth of 9.5% to Rs432.3 crores.
Gross Margins increased by ~650 bps over previous year to 79.4% (I-Direct estimate 75.1%)
Adjusted PAT increased 36.9% YoY to Rs 2166 crores (I-Direct estimate Rs 1916 crore)
ICICIdirect Research view on Sun Pharmaceuticals Industries Ltd Stock
Views: The company’s performances continued to thrive on remunerative businesses of US (and Global) Specialty and domestic formulations. What is more important is despite muted Taro results the company was able to deliver decent quarter. It remains strategically focused on Specialty business (which is evident by recent Concert acquisition) and Branded formulations for future growth with calibrated R&D allocation.
Impact: Positive
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