Sun Pharma - Q1FY14 Results - IIFL

- Sun Pharma again beats our estimates; grew 30.5% yoy and 13.5% qoq to Rs35bn vs. expectation of Rs32b

- The net sales grew by 23% yoy; Adjusted for lower sales recorded in the domestic business in Q1 FY13

- Domestic market adjusting for low base of last year grew healthy by 11% yoy to Rs8.5bn;reported growth of 44.4% yoy

- US Formulation clocked in strong revenue growth of 32% yoy to Rs20.3bn; largely led by full integration of its acquired companies and better realsiation; dollar growth at 28% yoy

- RoW grew by 23% yoy to Rs4.5bn; growth of 19% in dollar terms

- Operating margins declined 200bps yoy and increased 297bps qoq to 441.3%; Margins are strong even after the integration of the acquired companies

- On the reported basis, the company recorded a net loss of Rs12bn, on account of one-time charge of Rs25bn towards the settlement of the generic Protonix litigation in the US

- We believe the growth momentum will continue with the strong franchise in domestic market along with the niche launches and integration of DUSA Pharma & URL will keep the thrust on going in the US market. We upgrade our rating to BUY with a revise target of Rs560

Source : Equity Bulls

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