21-05-2025
Sun Pharma Q4 Preview: PAT may grow 6% YoY; domestic business to drive revenue
Pharma major Sun Pharma is likely to see high single-digit growth in its bottom line in the fourth quarter on the back of continued outperformance in the domestic business. According to an average estimate of five brokerages, revenue is expected to grow 9% year-on-year (YoY).
ADVERTISEMENT Meanwhile, net profit for the reporting quarter will lag the revenue as an average of five estimates showed 6% YoY growth.
Analysts are building in $500 million US sales in 4QFY25, primarily due to higher gRevlimid sales. Meanwhile, gross margins are seen declining 30 bps QoQ to 79.7% due to lower milestone income.
For the specialty business, there is 20% YoY growth expectation at $325 million for 4Q owing to steady execution.
We expect Sun Pharma's 4QFY25 overall sales to grow 8% YoY. For the global specialty business, we bake in a 17% QoQ sales decline to $308 million in 4QFY25, as specialty sales in 3QFY25 had inventory buildout and seasonality benefit. We build in a 9% YoY growth in India and a 9% YoY growth in RoW/EMs for 4QFY25.
ADVERTISEMENT We expect Sun Pharma's 4QFY25 gross margins to decline 30 bps QoQ to 79.7% due to lower milestone income. We bake in R&D spends at 7.7% of sales in 4QFY25 (+150 bps QoQ). On the EBITDA front, we factor in a 12% YoY growth to Rs34.7 bn, with an EBITDA margin decline of 390 bps QoQ to 26.8% due to higher R&D spend.
ADVERTISEMENT Expect DF sales to grow 13% YoY for the quarter. Clarity on the launch of Deuruxolitinib in the US market and watch out for the launch in other global markets. Factors to drive consistent growth in branded generics in emerging/ROW markets. Any further progress on products in Amplitude decline seen as Q3 had one-off milestone income in ROW markets coupled with sequential fall in domestic business. US to inch up 2% QoQ on likely better Taro numbers (based on historical pattern). Higher R&D vs Q3 to dampen margin QoQ.
ADVERTISEMENT NuvamaWe build Sun Pharma's revenue to grow by 9% YoY as domestic business continues its outperformance at 10%. We build US revenue at $503 million and global specialty business at $335 million, with dermatology product sales seeing improvement. R&D spend is expected to be at 6.4% of the sales. We estimate EBITDA/PAT to grow by 22%/4% YoY with EBITDA margins at 28.4% for Q4FY25.
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