Last updated: 02 Aug, 2021 | 05:44 am
Profits in line with estimates: Sun Pharma has reported a net profit of Rs 1,444.2 crore for the quarter ended June, up 62% sequentially. Analysts had estimated a profit of about Rs 1,412.8 crore. In the year-ago period, the company had reported a net loss of Rs 1,655.6 crore (one-time exceptional loss). The strong numbers were the outcome of factors like robust core business growth, sale of Covid products, and low base.
Revenue rises: Revenue rose 14% sequentially to Rs 9,718.7 crore in the quarter ended June beating the analysts’ forecast of Rs 8,793.4 crore. On a yearly basis the revenue rose by 28% from Rs 7,585 crore in the same quarter last year.
Margins expand: The company's EBITDA for the Apr-June quarter came in at Rs 2,771.8 crore, up by 59% compared to the year-ago period . Analysts’ had projected the EBITDA levels to Rs 2,114 crore. Margins for the same quarter expanded to 28.2% from 24.2% in the last quarter.
Sun Pharma Q1: Important highlights
Formulation sale: Sales of branded formulations in India for the Apr-Jun quarter were at Rs 3,308.4 crore, up by 39% over Q1 of last year, and accounting for 34% of total sales. The company's formulations sales in the US including Taro were at Rs 2,800 crore, a growth of 35% over the first quarter of last year and accounting for about 29% of total consolidated sales. The company's sales in Emerging Markets were at Rs 1,605.26 crore for the quarter under consideration and a growth of 25% over the first quarter of last year. Overall sales in Emerging Markets accounted for about 17% of total consolidated sales for the quarter. Formulation sales in Rest of World (ROW) markets were at Rs 1,368 crore up by 35% and accounted for approximately 14% of total consolidated sales.
Exceptional Loss: During the quarter, the company reported a one-time exceptional loss of Rs 631 crore in relation to payments made for settlement of antitrust litigations filed by the US Department of Justice against arm Taro Pharmaceutical Industries as well as impairment of certain assets. The company also made a provision of Rs 442 crore in the quarter ended June in relation to the anti-trust lawsuit settlement with the US government. Further, the company took charge of Rs 150 crore during the quarter for impairment of acquired intangible assets under development and Rs 38 crore write down of assets under IND AS 105.
Sun Pharma Q1 results Review:
Sun Pharma reported strong results of the Apr-Jun quarter due to all-around growth across all businesses During the quarter, Sun Pharma spent Rs 592.6 crore on research and development, up by 41% from the year-ago quarter.The company has repaid debt of about Rs 1376 crore in the quarter ended June and over the last 5 quarters, the company has repaid debt of about Rs 5,690 crore. Sun Pharma shares jumped 10.06% to end at Rs 774 apiece on BSE after the earnings announcement. During the session, the stock registered a 52-week peak of Rs 780.10 apiece.
Sun Pharma Q1: Brokerage outlook
Following the Q1 earnings, most foreign brokerages including Citi, JP Morgan and CLSA have maintained a bullish outlook on the shares, mainly due to Sun Pharma’s strong show in the Specialty business. CLSA has a Buy call with a target price of Rs 960 on the stock. The firm noted that Sun Pharma’s specialty ramp-up is on track to achieve EBITDA breakeven by FY23. Citi noted that Specialty business is picking up, and has the potential to drive up the company’s operating leverage. Citi has a Buy call with a target of Rs 910.