Sun Pharmaceutical Posts Shining Numbers

The results of the biggest Indian pharmaceutical company in terms of market capitalisation, Sun Pharmaceutical Industries posted better than expected numbers for Q3FY14.

The topline of the company grew by 50% on YoY basis for Q3FY14 to stand at Rs 4312.44 crore. The topline growth can be attributed to better performance of the international revenues which accounted for 75% of the topline. The US formulation business grew by 79% on YoY basis to stand at Rs 2678 crore. On the other hand the other export markets ex-US gained by 32% (ROW Formulation) to stand at Rs 520.71 crore. On the US formulation front Taro recently posted Q3 FY14 sales of US$ 213 million, up 15% from the corresponding quarter last year.

What is more exciting is that the Indian formulation business grew by 20% on YoY basis for the said period to stand at Rs 947.18 crore. One point that needs to be mentioned is that most of the other companies on the domestic front, posted an average growth of around 10% to 15%. On the domestic front, the company holds 5.3% market share as per December 2013 AIOCD-AWACS report. . It continues to be ranked no. 1 based on share of prescriptions with 7 classes of specialists: psychiatrists, neurologists, cardiologists, ophthalmologists, orthopedicians, nephrologists and gastroenterologists.

On the operational front, the EBITDA margin of the company expanded by 192 basis points on YoY basis to stand at 46.40%. The EBITDA has grown by 57% on YoY basis to stand at Rs 2000 crore for Q3FY14.

On the API (active pharmaceutical ingredients) front, a cumulative of 252 DMF / CEP applications have been made, with 172 approved so far. External sales of API reached Rs. 174 crores in Q3FY14, a decrease of 17% over Q3 last year. For 9 months FY14, API sales declined 1% to Rs. 579 crores over 9 months last year. This decline is mainly due to increased captive consumption of APIs. Consolidated R&D expense for Q3 FY14 was Rs. 306 crores, or 7.1% of sales as against Rs 188.37 crore or 6.57% of sales.

The company has revised its consolidated FY14 revenue growth guidance revised to 29% compared to previous guidance of 25%. The revised guidance takes in to account the performance achieved in 9MFY14, higher base of Q4FY13 on consolidation of acquisitions as well the risks associated with increase in competition for some products. Bullish trades in the counter in the near term cannot be ruled out.