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- 29 Oct 2024
- ICICI Securities
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SUN PHARMA Q2FY25- US, INDIA DRIVE GROWTH; MARGINS STRONG
News: Revenues grew ~9% YoY to ₹ 12653 crore driven by strong US growth of ~22% to ₹ 4327 crore, driven mainly by specialty growth and possible traction from gRevlimid. India Formulations grew 11% to ₹ 4265 crore driven by new product launches (14 launches) and increased prescription share. Emerging markets grew ~3% to ₹ 2452 crore, driven by branded generics traction. RoW markets, on the other hand witnessed a de-growth of ~3.5% to ₹ 1663 crore, mainly due to pricing pressure in Japan. Global Specialty sales came in at US$ 286 million, up 19% YoY. EBITDA stood at ₹ 3811 crore, up ~19% YoY, with resulting EBITDA margins of 28.7%, driven by GPM improvement (up ~259 bps to 79.7%) and lower employee cost. Net profit came in at ₹ 2905 crore, up 20% YoY.
Views: Sun Pharma’s performance continued to thrive on remunerative businesses of global specialty (mainly US and other markets) and domestic formulations. Overall better product mix with higher domestic sales and specialty business aided margin expansion during the quarter. The India business continued to deliver volume-driven growth. On the exports front, the company remains strategically focused on specialty business which is evident from a significant increase in R&D allocation towards Specialty from 24% to 38% in H1FY25. The recent USFDA approval for Leqselvi (deuruxolitinib, a late-stage, potential best-in-class treatment for alopecia areata) in the US is yet another specialty addition in the specialty portfolio. We continue to monitor progress on the specialty front and the domestic formulations which are the main levers for margin expansion.
Impact: Positive