Sun Pharma committed to FY24 revenue guidance; analysts say shares can rise 17% more
Contrary to analysts' earlier expectations, FY24 is unlikely to see pressure for Sun Pharmaceutical Industries as some drugs from Halol are regaining market share while Mohali inches towards normalcy from H2.
The June quarter earnings of Sun Pharmaceutical Industries were well ahead of Street estimates. This outperformance was primarily driven by US generics (ex-Taro) including gRevlimid and healthy specialty sales of $232 million notwithstanding seasonality and Mohali or Halol regulatory issues.
"US business as we said did well, with the combination of speciality business doing well and we had higher quantities of generic might sold during the current quarter," said CS Muralidharan, Group Chief Financial Officer, Sun Pharma.
The upward trajectory of specialty business continues with increasing volume share of Ilumya and Winlevi (Winlevi has garnered 26 percent share among top 10 branded drugs). "We expect Sun Pharma's global specialty business to be $1 billion in FY24, which should further aid overall profitability," said JM Financial.
Contrary to Nuvama's earlier expectations, FY24 is unlikely to see pressure for the multinational pharmaceutical company as some drugs from Halol are regaining market share while Mohali inches towards normalcy from H2.
Speaking to CNBC-TV18 on Friday, Muralidharan said Sun Pharma remains committed to FY24 guidance of high-single digit growth in revenue. "We remain committed to our revenue guidance, which is high single digit growth at this point of time over the previous year, and as such the remaining many moving parts where we do not give any EBITDA guidance at this point of time."
However, Muralidharan said that it will be difficult to give any EBITDA margin range or guidance at this point of time.
Not giving specific guidance on speciality biz
In terms of speciality business, Sun Pharma has done well in the current quarter. "While we are not giving any specific guidance for speciality business, sequential marginal decline on account of as we shared on account one of the products Levulan due to seasonal impact and of course, in the previous quarter, Q4 FY23, we had one receipt of milestone payment," the group CFO noted.
On Taro operations
In the case of Taro, Muralidharan said that it will be difficult to share any further information than what Taro has already shared in their press release.
As far as the process of Taro is concerned, the board has appointed special committee, and they will take the further steps forward. He further said, "We see an opportunity to manage operations more efficiently."
Sun Pharma share price targets
Foreign brokerage Jefferies has a 'Buy' call on Sun Pharma, with a target price of Rs 1,310 as core earnings driver remain intact led by specialty sales ramp up.
Motilal Oswal remain positive on the counter backed by its robust innovative products franchise targeted for global markets and superior execution in branded generics markets. The brokerage has a 'Buy' call with a target of Rs 1,310.
Nuvama said, "We raise our FY24E/25E core EPS (earnings per share) by 2 percent/3 percent and multiple to 28 times (from 25 times) due to a sticky revenue stream. This yields an Rs 1,320 target price (earlier Rs 1,120); roll over to Q1FY26E."
First Published: Aug 4, 2023 1:44 PM IST
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