- 02 Aug 2024
- ICICI Securities
SUN PHARMA Q1FY25- INDIA, SPECIALTY DRIVE GROWTH; MARGINS STRONG
SUNPHARMA - 1757 Change: -14.00 (-0.79 %)News: Revenues grew ~6% YoY to ₹ 12653 crore driven by strong India growth of 16% to ₹ 4145 crore. US growth was flat at ₹ 3889 crore due to high gRevlimid base. Excluding gRevlimid, the growth was driven by specialty and other generics. India Formulations growth was driven by new product launches (6 launches) and increased prescription share. Emerging markets grew ~9% to ₹ 2035 crore, driven by branded generics traction. RoW markets, on the other hand witnessed a de-growth of ~3% to ₹ 1581 crore, mainly due to pricing pressure in Japan. Global Specialty sales came in at US$ 266 million, up 15% YoY. EBITDA stood at ₹ 3658 crore, up ~10% YoY, with resulting EBITDA margins of 28.9%, driven by GPM improvement (up ~200 bps to 78.9%) and lower employee cost. Net profit came in at ₹ 2836 crore, up 24% YoY.
Views: Sun Pharma’s performance continued to thrive on remunerative businesses of global specialty (mainly US and other markets) and domestic formulations. Overall better product mix with higher domestic sales and specialty business aided margin expansion during the quarter. The India business continued to grow with a branded portfolio, leading to an increase in its market share. On the exports front, the company remains strategically focused on specialty business which is evident from a significant increase in R&D allocation towards Specialty from 24% to 45% in Q1FY25. The recent USFDA approval for Leqselvi (deuruxolitinib, a late-stage, potential best-in-class treatment for alopecia areata) in the US is yet another specialty addition in the specialty portfolio. We continue to monitor progress on the specialty front and the domestic formulations which are the main levers for margin expansion.
Impact: Positive