Sun Pharma shares rise 4% after strong set of earnings from Taro
Taro Pharma clocked in an operating income of $15.83 million in the third quarter, compared to $1.3 million recorded in the same quarter of the previous fiscal. The firm's margins stood at 10.8%.The Sun Pharma arm didn't share any significant details on reasons for its improvement.
Shares of Sun Pharmaceutical Industries Limited rallied 4% to hit a record high of ₹1,420.85 apiece on the NSE in trade Monday (January 29) after its subsidiary Taro Pharmaceutical Industries reported better-than-expected numbers in the third quarter (Q3FY24).
Taro reported a profit of $20.2 million in Q3 as against a profit of $7.3 million in the corresponding quarter of last year. The company's revenue rose 13% year-on-year to $157.14 million in the quarter under review.
Taro Pharma also clocked in an operating income of $15.83 million in the third quarter, compared to $1.3 million recorded in the same quarter of the previous fiscal. The firm's margins came in at 10.8%.
The Sun Pharma's Israel-based arm didn't gave any significant details on reasons for its improvement.
According to brokerage Elara Securities, the synergies is likely to have started playing out as the buyout of minority shareholders approaches. It also said that Taro's 70% EBITDA beat equals to 3% beat on consolidated EBITDA estimates for Sun Pharma when it reports its Q3 numbers.
Positive earnings from Taro Pharma is also expected to boost parent Sun Pharma's consolidated earnings. The pharmaceutical major is slated to release its quarterly earnings on January 31, 2024.
This month, Sun Pharma said it will acquire the remaining 21.52% stake in Taro Pharmaceutical Industries for ₹2,891.7 crore.
The purchase of outstanding public shares will allow Sun Pharma to consolidate control over Taro. Sun Pharma currently owns 78.48% in Taro.
In the past, Sun Pharma had faced resistance from Taro's minority shareholders in its bid to take full control over the company.
The deal comes as a culmination to nearly 17 years of back and forth to gain full control of the US-listed generic drugmaker which does most of its business in the United States and Canada.
Upon completion of the merger, which is expected to close in the first half of the year, Taro would become a privately held company and will be delisted from the New York Stock Exchange, the companies had said earlier.
First Published: Jan 29, 2024 11:49 AM IST
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