More Stories

Informist, Wednesday, May 21, 2025

 

By Sunil Raghu

 

AHMEDABAD – An expected double-digit growth in the specialty products business, steady domestic sales, and moderate performance in the US market are likely to help Sun Pharmaceutical Industries Ltd. post healthy year-on-year earnings for the March quarter, according to analysts.

 

Sun Pharma is projected to report 8.8% on-year rise in its Jan-Mar consolidated net profit to INR 28.9 billion, with revenue expected to increase 11% year-on-year to INR 132.8 billion, based on the average of estimates of 16 brokerages. Sequentially, the company's net profit is estimated to decline marginally by 0.5%, while revenue is expected to fall by 3%.

 

Among the projections, Equirus Securities Pvt. Ltd. has the lowest net profit estimate of INR 23.3 billion while Centrum Broking Ltd. has the highest at INR 35.8 billion. For revenue too, the lowest estimate is INR 128.5 billion by Equirus Securities and the highest at INR 144.9 billion, again by Centrum Broking.

 

According to Centrum Broking, Sun Pharma's domestic formulations business is expected to post a 13% on-year growth in revenue to INR 42 billion and its US sales are expected to grow 11.5% on year to $531 million, led by continued traction in the specialty portfolio. It is also expected to see highest margin expansion of 430 basis points on year in Jan-Mar.

 

On Wednesday, shares of the company end the day 1.4% higher at INR 1,731.80 on the National Stock Exchange. This is just 0.7% lower than INR 1,743.95 at the close of trading on Jan. 31, when Sun Pharma announced its Oct-Dec earnings.

 

Over the past few years, Sun Pharma's dependency on generics has reduced and speciality products segment is contributing more to margins and overall profitability, apart from the continued strong growth in domestic pharma market.

 

Nomura Equity Research sees global specialty sales for Sun Pharma rising 10.7% on year to $300 million in the March quarter. It said export data suggests 'significant' exports to the US by Sun Pharma in Jan-Mar, driven by Revlimid. Nomura sees overall US sales of Sun Pharma at $539 million and excluding Revlimid, there was likely no material traction in rest of the generic portfolio in Jan-Mar. In fact, the research firm said that there was a recent decline in prescription share of generics of Pentasa and Ciprodex drugs.

 

Kotak Institutional Equities projected US sales for the quarter will rise 5% on quarter to $500 million, while specialty share in this would be $308 million, down 17% on quarter. Sun Pharma has key products like Ilumya, Cequa, Winlevi, and Odomzo in its specialty products portfolio. Ilumya is used to treat moderate-to-severe plaque psoriasis, while Cequa addresses dry eye disease. Winlevi is a topical treatment for acne and Odomzo is prescribed for locally advanced basal cell carcinoma that cannot be treated with surgery or radiation. Sun Pharma has significant market share in each of these products. Kotak Equities has factored in 9% growth in India business and similar on year growth in rest of the world during the March quarter.

 

Most analysts expect Sun Pharma's March quarter earnings before interest, tax, depreciation and amortisation, or EBITDA, margins to be impacted by higher spending on research and development. According to an average of estimates of 16 brokerages, EBITDA for the March quarter is pegged at INR 36.7 billion with the lowest estimate being INR 33.5 billion and the highest being INR 42.5 billion. While Nomura expects the company's R&D spend to be slightly higher at 6.6% of the sales for the quarter, Kotak Equities expects it at 7.7% of the sales, impacting the margins. Kotak Equities said EBITDA margin will decline by 390 basis points sequentially to 26.8%.

 

Market participants keenly await company commentary on research and development cost guidance, updates on specialty drug pipeline, specialty business margins and on complex generics. They are keenly watching for the company's commentary on its revenue guidance for the new financial year and research and development spend in the wake of clouded and uncertain macro outlook. Analysts are also keen to know whether the company would guide for spend of 8% of sales on its R&D activities in 2025-26 (Apr-Mar), looking at the possibility of multiple phase 3 clinical trials that could commence in second half of FY26.

 

The company will detail its quarterly results on Thursday.

 

Following are the Jan-Mar earnings estimates for Sun Pharmaceutical Industries based on reports from 16 brokerage firms in descending order by the estimate of net profit:

 

Brokerage	Net sales (in mln rupees)	Net profit (in mln rupees)	EBITDA (in mln rupees)
Centrum Broking Ltd	144,856	35,784	42,501
PhillipCapital (India) Pvt Ltd	126,042	31,583	38,500
ICICI Securities Ltd	130,409	30,497	35,862
Systematix Shares and Stocks (India) Ltd	133,387	30,483	38,622
Choice Equity Broking Pvt Ltd	131,054	29,752	37,835
Nomura Equity Research	131,573	29,380	38,181
Ashika Stock Broking Ltd	135,439	29,801	36,655
Motilal Oswal Financial Services Ltd	130,600	29,000	25,700
HDFC Securities Ltd	131,602	28,921	35,483
Nuvama Wealth Management Ltd	130,167	28,531	36,968
Nirmal Bang Equities PVt Ltd.	138,854	28,295	37,794
JM Financial Institutional Securities Pvt Ltd	130,623	28,090	35,613
Kotak Institutional Equities	129,665	27,153	34,743
Elara Securities (India) Pvt Ltd	130,486	26,739	33,474
Prabhudas Lilladher Pvt Ltd	130,735	25,592	35,016
Equirus Securities Pvt Ltd	128,506	23,291	34,152
Average	132,749.88	28,885.75	36,693.69

 

End

 

Edited by Ashish Shirke

 

For users of real-time market data terminals, Informist news is available exclusively on the NSE Cogencis WorkStation.

 

Cogencis news is now Informist news. This follows the acquisition of Cogencis Information Services Ltd by NSE Data & Analytics Ltd, a 100% subsidiary of the National Stock Exchange of India Ltd. As a part of the transaction, the news department of Cogencis has been sold to Informist Media Pvt Ltd.

 

Informist Media Tel +91 (22) 6985-4000

Send comments to feedback@informistmedia.com

 

© Informist Media Pvt. Ltd. 2025. All rights reserved.