Sun Pharma Q2 Review: Systematix Maintains 'Buy' Post Inline Results — Check Target Price

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Systematix Report

Sun Pharmaceutical Industries Ltd.’s revenues (Rs 144,783 million) grew by 8.9% YoY and 4.5% QoQ and were in line with our and consensus estimates. India business, Emerging Markets and Rest of World growth was strong (11%, 16%, 23% respectively), which was offset by weakness in North America (flat YoY and up 7% QoQ).

North America generics revenue was lower YoY; however, the Innovative Medicines portfolio grew over the same period. gRevlimid contribution is expected to diminish going forward. Global Innovative Medicines portfolio was up 16% YoY.

Growth in the innovative portfolio should sustain/accelerate going forward, led by the ramp up of Leqselvi (deuruxolitinib) and launch of Unloxcyt (Cosibelimab).

Ebitda (Rs 45,271 million; up 15% YoY and 5% QoQ) was ahead of our estimates by 3.5%. Lower other expenses aided Ebitda margin expansion (up 163 bps YoY and 21 bps QoQ).

Other expenses stood at Rs 42,037 million, up 6.9% QoQ but flat YoY. We retain Buy with a target price of Rs 2,050 based on 35x FY27 earnings per share.

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