Sun Pharma - Q3FY13 Preview - HDFC Securities

Revenue expected to go up by 18-20% y-o-y led by continuing strong growth in its US business and domestic branded formulations. Integration of Taro and increase in Taro product prices in the US market could drive sales for US business. During the quarter it has acquired dermatology business of Dusa, US and UCL's generic product business from Takeda Pharma.

The company has divested the domestic formulation business into a 100% subsidiary for enhanced focus on the business. EBIDTA margin could decline due to receding benefit from Doxil supplies, pressure on margins in Taro and increase in R&D and other overheads. However, higher contribution from Taro, continuing Lipidox sales and higher other income could result in higher PAT.

Key drivers for the future include ramp-up in the US business, monetization of the Para-IV/low competition pipeline in the US, launch of controlled substances in the US, sustaining Taro's high profitability, and ability to leverage on Dusa's technology franchise.

Source : Equity Bulls

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