Result Analysis – Sun Pharmaceutical Ltd.

Result Highlight: 

• Sun Pharma Revenue was flat QoQ and rose 12.54% YoY to ₹ 9625 crore – better than the estimates of ₹ 8980 Crore. Other income fall87% YoY to ₹ 222.8 Crore.

• Company reported EBITDA of ₹ 2630 crore vs ₹2192 crore same quarter last year Margin was flat at 32% from 28.52% last quarter.

• Net profit rose 12.92% YoY to ₹2047 crore for the September quarter compared with ₹ 1812 crore in the same  quarter last

• The company reported strong operating Cash flow of ₹ 4027 Crore and free cash flow of ₹3046 crore in Q2 FY22.

• In US Market Company register a growth of 7.46% Y-o-Y.

• Sun subsidiary Taro Pharmaceuticals resolved all matters in connection with the multi-year investigations by the Department of Justice, Antitrust Division and Civil Division (“DOJ”) into the United States generic pharmaceutical industry.

• Dusa Pharmaceuticals, Inc. reached an agreement with the U.S. Department of Justice and an individual to resolve allegations relating to the sales, marketing and promotion of two of its products – Levulan and Blu-u, as extension of a Civil Investigation Demand for the period January 2010 to September 2017. The Company had made a provision of ₹1,563.6 Million for this settlement during the year ended March 31, 2020.

• Taro posted Q2FY22 sales of US$ 132 million, lower by about 8% YoY and adjusted net profit of about US$ 25 million, lower by 45% over Q2 last year.

• Consolidated R&D investment for Q2FY22 was ₹ 536 crore as compared to ₹ 612.7 crore for Q2 last year. The reduction is due to spill-over of certain clinical studies into subsequent quarters. For the first half, R&D expense was ₹1129 crore, or 5.9% of sales.

Management commentary: 

Dilip Shanghvi, Managing Director of the Company said, “Following our good Q1 performance, we have sustained the positive momentum in Q2 with a topline growth of 13% YoY, driven by a broad-based growth across multiple geographies. Our global specialty business has grown by 43% over Q2 last year. Ilumya has grown both YoY and sequentially. Our India business continues to do well with a growth of 26% YoY. We remain steadfast in our focus on growing our overall business and simultaneously strengthening our global specialty portfolio. The recent launch of Winlevi in US and Ilumya in Canada is a step forward in this direction.

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