Sun Pharma Q3 Results Review - Inline Performance; Growth Levers In Place: Systematix

Systematix Research Report

Sun Pharmaceutical Industries Ltd.’s Q3 FY23 earnings at Rs 21,660 million was in line with our/consensus estimates.

Despite the impact of Halol import alert, the U.S. business grew 5% QoQ led by growth in specialty assets – Levulan, Ilumya, Winlevi and Cequa. While Winlevi volumes declined QoQ, there was growth as realisations improved during the quarter.

However, the India business delivered sluggish growth of 7% YoY, as Sun Pharma was impacted by price cuts taken on two in-licensed products which went off patent and poor performance in the Gastro-Intestinal business unit.

Higher research and development expenses, depreciation and other operational costs plugged margin expansion during the quarter.

There were also one off costs related to Halol import alert during the quarter. Tax rate for the quarter (11%) was higher compared to H1 FY23 (7%). We remain positive on the long-term prospects of the company.

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