Sun Pharma Q2 cheers Street
1 min read . Updated: 02 Nov 2022, 10:33 PM IST
PremiumThe US formulations business grew 14% to $412 million, contributing 30% to overall revenues
NEW DELHI : Sun Pharmaceutical Industries Ltd’s second quarter earnings were led by growth in the specialty business, as well as US generics and domestic formulations, said analysts tracking the company.
On Tuesday, Sun Pharma reported a quarterly net profit of ₹2,262.2 crore, up 10.5% from the year earlier. Earnings before interest, tax, depreciation and amortization (Ebitda) rose 12.4% to ₹2,956.5 crore during the period. Shares of Sun Pharma rose more than 3% to touch a 52-week high of ₹1,070.80 on the BSE, before closing 1.81% up at ₹1,051.75.
The US formulations business grew 14% to $412 million, contributing 30% to overall revenues. US subsidiary Taro’s sales of $130 million were marginally lower year-on-year, but the growth in the US generics business is likely to have supported growth, analysts said.
Continued traction in specialty products was the primary reason earnings beat estimates, said analysts at HSBC Securities and Capital Markets (India) Pvt Ltd. Sun Pharma said the global specialty business has grown by 27.5%, driven by drugs such as Ilumya, Cequa, and Winlevi. Domestic formulations grew 8.5%, contributing almost a third to overall revenues and helping net sales grow about 14%.
Costs will likely rise for research and development, as well as sales and marketing. However, analysts at HSBC said healthy sales in key segments such as specialty brands and India formulations should result in operating leverage.
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Analysts are upbeat on the outlook for Sun Pharma. Elara Securities India Pvt Ltd expects FY22-24 global specialty sales to grow at a compounded annual rate of 18%. HSBC analysts also say that specialty sales are a key driver of US sales, with a compound annual growth rate of 17.5% for FY 22-25.
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