Sun Pharma share price rose over 10% today to a 52-week high of Rs 780 on the BSE, after the company reported strong results for the June quarter.
Its bottomline surged 73% year on year (YoY) to Rs 19.8 bn. The reported net profit in the same quarter stood at Rs 14.4 bn.
Sun Pharma was able to post good set of numbers mainly due to its robust operational performance.
The company reported consolidated sales of Rs 96.7 bn, a growth of 29% over last year. If compared sequentially, sales were up 14%.
Topline figures beat estimates as the street was expecting Sun Pharma to post a 19.5% revenue growth for the quarter.
The growth in revenues was due to 39% YoY jump in domestic formulations to Rs 33.1 bn. It can also be attributed to the 35% YoY rise in US formations business to Rs 28 bn.
The topline base for the year-ago quarter was also low, which was affected by the national lockdown in India and reduced sales in major export markets.
EBITDA jumped 59% YoY to Rs 27.7 bn.
Sun Pharma spent more towards its R&D amounting to Rs 5.9 bn, a jump of 41% from the year-ago quarter.
In a press release, Sun Pharma's MD Dilip Shanghvi said,
During the quarter, Sun Pharma repaid debt of about US$185 m. Over the last five quarters, the company has repaid debt of about US$765 m.
Sun Pharma is ranked as the top company and holds above 8% market share in the Indian pharma market as per AIOCD AWACS MAT June-2021 report.
For the June quarter under review, the company launched 13 new products in the Indian market.
Sale of branded formulations in India were reported at Rs 33,084 m, up 39% YoY. US sales accounted for 29% of the total consolidated sales and rose 35% YoY.
Its emerging market sales were at US$218 m, a growth of 25% YoY. Meanwhile, Sun Pharma's external sales of API were down 7% YoY.
During the quarter, the company reported a one-time exceptional loss of Rs 6.3 bn in relation to payments made for settlement of antitrust litigations.
For this, the drugmaker has already made provisions of Rs 4.4 bn.
Further, the company took charge of Rs 1.5 bn during the quarter for impairment of acquired intangible assets under development and Rs 0.4 bn write down of assets.
Note that this settlement is a major relief for the company and its subsidiary as it remained an overhang on earnings given that it could have led to criminal and civil action against the company if found guilty in the US courts.
We reached out to Tanushree Banerjee, Co-Head of Research at Equitymaster, and editor of the premium stock recommendation service StockSelect, for her view on the pharma sector.
Here's what she has to say...
Sun Pharma share price opened the day on a flat note at Rs 704 compared to its previous close of Rs 703.25.
Just after the company announced its results during market hours, its shares saw a spike and rose over 10% to a new 52-week high.
Over the past year, Sun Pharma shares have gained 38%.
At the current price of Rs 774, the company commands a marketcap of Rs 1,857 bn.
Sun Pharma including its subsidiaries and associates is the fourth largest global specialty generic company that is ranked 1st in India and 8th in the US.
It's the largest Indian pharmaceutical company in the US and among the leading Indian pharmaceutical companies in emerging markets.
The company manufactures and markets a large basket of pharmaceutical formulations covering a broad spectrum of chronic and acute therapies.
It includes generics branded generics complex or difficult to make technology intensive products over-the-counter (OTC) products anti-retrovirals (ARVs) Active Pharmaceutical Ingredients (APIs) and intermediates.
To know more about the company, check out Sun Pharma company fact sheet and quarterly results.
For a sector overview, read our pharmaceuticals sector report.
You can also compare Sun Pharma with its peers.
To know what's moving the Indian stock markets today, check out the most recent share market updates here.
Disclaimer: This article is for information purposes only. It is not a stock recommendation and should not be treated as such. Learn more about our recommendation services here...
Yash Vora is a financial writer with the Microcap Millionaires team at Equitymaster. He has followed the stock markets right from his early college days. So, Yash has a keen eye for the big market movers. His clear and crisp writeups offer sharp insights on market moving stocks, fund flows, economic data and IPOs. When not looking at stocks, Yash loves a game of table tennis or chess.
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