X

Sign up for Equitymaster's free daily newsletter, The 5 Minute WrapUp and get access to our latest Multibagger guide (2017 Edition) on picking money-making stocks.

This is an entirely free service. No payments are to be made.


Download Now Subscribe to our free daily e-letter, The 5 Minute WrapUp and get this complimentary report.
We hate spam as much as you do. Check out our Privacy Policy and Terms Of Use.
Sun Pharma: Slow Growth Across Major Markets - Views on News from Equitymaster
StockSelect
  • MyStocks

MEMBER'S LOGINX

     
Login Failure
   
     
   
     
 
 
 
(Please do not use this option on a public machine)
 
     
 
 
 
  Sign Up | Forgot Password?  

Sun Pharma: Slow Growth Across Major Markets
Mar 11, 2017

Sun Pharma has announced its December quarter (3QFY17) results. The company has reported 8% YoY growth in sales and a decline of 4.7% YoY in the net profits. Here is our analysis of the results.

Performance summary
  • Top line (including other operating income) by 11% YoY. The growth was largely led by international markets. Emerging markets witnessed a growth of 14% YoY, while growth in Rest of the World markets was by 33% YoY. The company launched generic Benicar in US. The US business grew by 4% (In constant currency terms) YoY. The growth in US business was also impacted by decline in sales growth of its subsidiary Taro and base its base business. Sales were impacted due to price erosion and supply disruption. For the current quarter Taro reported decline in sales of 14% YoY. India formulations grew by 5% YoY. With impact of demonetisation and NLEM pricing restrictions, revenues from domestic growth was impacted. This has largely been on the back of addition of acute therapy drugs post merger of Ranbaxy and impact of Rs1,500m sales in India formulation in FY17E due to revised price of the drugs in NLEM-list.
  • The EBITDA margins for the quarter stood 31% for quarter vs 31.5% during 3QFY16, this was largely due pricing pressures in some of its key drugs leading to lower gross margins. The gross margins of Taro were down by 700 bps YoY. This too impacted
  • The net profits for the company were down by 4.7% YoY, this was largely attributable to sharp surge in the taxes.

    Financial performance: A snapshot
    (Rs m) 3QFY16 3QFY17 Change 9MFY16 9MFY17 Change
    Net sales 70,871 76,832 8.4% 204,721 234,391 14.5%
    Other operating income 352 2,294 551.0% 2,850 9,668 239.2%
    Expenditure 48,767 54,595 12.0% 148,707 158,641 6.7%
    Operating profit (EBDITA) 22,456 24,532 9.2% 58,864 85,418 45.1%
    EBDITA margin (%) 31.5% 31.0% 28.4% 35.0%
    Other income 1,729 1,222 -29.3% 4,522 3,987 -11.8%
    Interest (net) 1,276 1,665 30.5% 4,203 3,548 -15.6%
    Depreciation 2,509 3,068 22.3% 7,495 9,266 23.6%
    Profit before tax 20,401 21,020 3.0% 51,689 76,591 48.2%
    Exceptional (loss) 0 0 -6,851 0
    Minority Interest 4,064 2,573 -36.7% 8,580 7,511
    Tax 888 3,729 319.8% 4,962 11,673 135.2%
    Profit after tax/(loss) 15,449 14,718 -4.7% 31,296 57,407 83.4%
    Net profit margin (%) 21.8% 19.2% 15.3% 24.5%
    No. of shares (m) 2,407.0
    Adj Diluted earnings per share (Rs) 29.9
    Price to earnings ratio (x)* 22.6
    *based on trailing 12 months earnings
To Read the Full Story, Subscribe or Sign In



DISCLOSURES UNDER SEBI (RESEARCH ANALYSTS) REGULATIONS, 2014
INTRODUCTION:
Equitymaster Agora Research Private Limited (hereinafter referred to as "Equitymaster"/"Company") was incorporated on October 25, 2007. Equitymaster is a joint venture between Quantum Information Services Private Limited (QIS) and Agora group. Equitymaster is a SEBI registered Research Analyst under the SEBI (Research Analysts) Regulations, 2014 with registration number INH000000537.

BUSINESS ACTIVITY:
An independent research initiative, Equitymaster is committed to providing honest and unbiased views, opinions and recommendations on various investment opportunities across asset classes.

DISCIPLINARY HISTORY:
There are no outstanding litigations against the Company, it subsidiaries and its Directors.

GENERAL TERMS AND CONDITIONS FOR RESEARCH REPORT:
For the terms and conditions for research reports click here.

DETAILS OF ASSOCIATES:
Details of Associates are available here.

DISCLOSURE WITH REGARDS TO OWNERSHIP AND MATERIAL CONFLICTS OF INTEREST:
  1. 'subject company' is a company on which a buy/sell/hold view or target price is given/changed in this Research Report
  2. Equitymaster has financial interest in Sun Pharma.
  3. Equitymaster's investment in the subject company is as per the guidelines prescribed by the Board of Directors of the Company. The investment is however made solely for building track record of its services.
  4. Equitymaster's Associate has financial interest in Sun Pharma.
  5. Equitymaster's Research Analyst or his/her relative have no financial interest in the subject company.
  6. Neither Equitymaster, it's Associates, Research Analyst or his/her relative have actual/beneficial ownership of one percent or more securities of the subject company at the end of the month immediately preceding the date of publication of the research report.
  7. Neither Equitymaster, it's Associates, Research Analyst or his/her relative have any other material conflict of interest at the time of publication of the research report.
DISCLOSURE WITH REGARDS TO RECEIPT OF COMPENSATION:
  1. Neither Equitymaster nor it's Associates have received any compensation from the subject company in the past twelve months.
  2. Neither Equitymaster nor it's Associates have managed or co-managed public offering of securities for the subject company in the past twelve months.
  3. Neither Equitymaster nor it's Associates have received any compensation for investment banking or merchant banking or brokerage services from the subject company in the past twelve months.
  4. Neither Equitymaster nor it's Associates have received any compensation for products or services other than investment banking or merchant banking or brokerage services from the subject company in the past twelve months.
  5. Neither Equitymaster nor it's Associates have received any compensation or other benefits from the subject company or third party in connection with the research report.
GENERAL DISCLOSURES:
  1. The Research Analyst has not served as an officer, director or employee of the subject company.
  2. Equitymaster or the Research Analyst has not been engaged in market making activity for the subject company.
Definitions of Terms Used:
  1. Buy recommendation: This means that the subscriber could consider buying the concerned stock at current market price keeping in mind the tenure and objective of the recommendation service.
  2. Hold recommendation: This means that the subscriber could consider holding on to the shares of the company until further update and not buy more of the stock at current market price.
  3. Buy at lower price: This means that the subscriber should wait for some correction in the market price so that the stock can be bought at more attractive valuations keeping in mind the tenure and the objective of the service.
  4. Sell recommendation: This means that the subscriber could consider selling the stock at current market price keeping in mind the objective of the recommendation service.
Feedback:
If you have any feedback or query or wish to report a matter, please do not hesitate to write to us.

Become A Smarter Investor In
Just 5 Minutes

Multibagger Stocks Guide 2017
Get our special report, Multibagger Stocks Guide (2017 Edition) Now!
We will never sell or rent your email id.
Please read our Terms

SUN PHARMA SHARE PRICE


Sep 21, 2017 12:23 PM

TRACK SUN PHARMA

  • Track your investment in SUN PHARMA with Equitymaster's Portfolio Tracker. Set live price alerts, get research alerts and more. Get access now...
  • Add To MyStocks

SUN PHARMA - TEVA PHARMA COMPARISON

Compare Company With Charts

COMPARE SUN PHARMA WITH

MARKET STATS