Recommendation: Add
Target Price: Rs940
Sun Pharmaceutical Industries (Sun Pharma) may experience a 6% sequential decline in revenue from its global specialty businesses in the March 2022 quarter. ) in the December 2021 quarter. The loss of market share at Absorica is another pressure point. Although Cequa’s volume growth is facing headwinds, supposedly due to generic competition in Restasis, Cequa IU’s market share in the dry eye market has remained stable at around 3%. Sun’s Winlevi has seen a steady increase in prescription volumes, with the latest TRx weekly fill rate improving to ~8.1,000. This implies an annualized fill rate of approximately 422,000 TRx, which is significantly higher than other acne replacement products such as Onexton, Acanya, Epiduo Forte and Aczone, which saw around 96,000 to 370,000 prescriptions in their first year of launch.
The company’s individual products in the specialty business could begin to break even in EBITDA from FY23 and overall EBITDA margins for this business are estimated at +4-5% over the course of FY23. exercise 23.
The company’s after-tax profit (PAT) could drop 22% sequentially.
Important management information to monitor:
New launch pipeline
Margin drivers in the future
|
million rupees |
March 2022 estimates |
Annual change |
QoQ change |
| Revenue | 92,861 | ten% | (5)% |
| EBITDA | 23,215 | 16% | (ten)% |
| Profit after taxes | 16,056 | 20% | (22)% |
Source: IIFL Research
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