Sun Pharma (BUY, 10% upside) - AMBIT

Sun Pharma will announce its 1QFY14 results tomorrow. We expect the company's revenues to increase by 24% YoY to Rs33bn (in line with consensus estimates). The increase in revenue growth is likely to be due to a 27% YoY growth in the US formulations business which would be aided by: (1) consolidation of Dusa and URL, (2) exclusivity sales of generic Doxil, and (3) increased sales of Doxycycline (due to supply shortages). We expect the domestic business to expand 18% YoY due to the low base. Sun's EBITDA is likely to improve by 11% YoY to Rs13.7bn (5% below consensus estimates) but EBITDA margins would decline by 496bps YoY to 41.3%. Adjusting for a part of the payment made towards the litigation settlement involving Protonix, we expect Sun to report PAT of Rs9.2bn (up 16% YoY and in line with consensus estimates).

Source : Equity Bulls

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