New Delhi Sun Pharmaceutical Industries Ltd.’s second-quarter earnings were driven by growth in the specialty business as well as US generics and domestic formulations, analysts tracking the company said.
Sun Pharma reported quarterly net profit on Tuesday 2,262.2 crore, 10.5% more than a year ago. Earnings before interest, tax, depreciation and amortization (Ebitda) up 12.4% 2,956.5 crore during this period. Sun Pharma shares climb over 3% to touch 52-week high 1,070.80 on BSE, up 1.81% before closing 1,051.75.
The US formulations business grew 14% to $412 million, contributing 30% to total revenue. Analysts said US subsidiary Taro’s sales of $130 million were marginally lower year-on-year, but growth in the US generics business is likely to support growth.
Analysts at HSBC Securities and Capital Markets (India) Pvt Ltd continued traction in specialty products was the primary reason, said analysts at HSBC Securities and Capital Markets (India) Pvt Ltd. Sun Pharma said the global specialty business grew 27.5%, driven by drugs like Illumya, Sequa and the like. Winlevy. Domestic formulations grew 8.5%, contributed nearly a third to total revenue and net sales increased nearly 14%.
Costs for research and development as well as sales and marketing are likely to increase. However, analysts at HSBC say that good sales in key segments such as specialty brands and Indian formulations should result in operating profit.
Analysts are bullish on Sun Pharma’s outlook. Elara Securities India Pvt Ltd expects global specialty sales for FY22-24 to grow at a compound annual rate of 18%. HSBC analysts also say specialty sales are a key driver of US sales, with a compound annual growth rate of 17.5% for FY22-25.
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