Sun Pharma's US business Taro Pharma reported its best quarterly performance in two quarters led by an improvement in the Proactiv franchise, improvement in prices and demand in the US generics business. Taro had completed the acquisition of Alchemee, formerly The Proactiv Company, from Galderma in February last year for an undisclosed sum.
The unit reported revenue of $146.6 million in the March quarter, which is 2 percent higher than the December quarter revenue of $139.2 million.
Despite the improvement in numbers, the revenue is yet to reach the pre-COVID peak of $179.9 million during the fourth quarter of 2019.
While the company's operating profit, net profit and margin narrowed on a year-on-year basis, the operating income and margin have improved on a sequential basis.
Taro's EBITDA margin for the March quarter stood at 6.3 percent, better than December's 1 percent, but lower than the 14.9 percent margin it reported during the same period last year.
Brokerage firm Elara believes that the numbers have improved significantly and that a pick-up seems sustainable. The firm also said that the improvement in Taro could help offset other areas of weakness for Sun Pharma, such as the acquisition of Concert.
Taro's revenue and operating profit beat Macquarie's expectations as well. The firm has an outperform rating on Sun Pharma with a price target of Rs 1,275.
Shares of Sun Pharma have given up their gains over the last few months and are currently down 6 percent for the year. The stock is now down 12 percent from its 52-week high of Rs 1,072. The stock opened 0.5 percent higher on Wednesday.
Taro Pharma's shares ended 3.4 percent higher overnight in the US.
(Edited by : Hormaz Fatakia)
First Published: May 24, 2023 9:28 AM IST
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