Shares of Indian multinational pharmaceutical company Sun Pharmaceutical Industries Limited rose by 6.56 percent to Rs 517.45 on Wednesday. The company reported a stable 70 percent year-on-year growth in profit after tax at Rs 1,813 crore in the second quarter of FY21. This led to a gain of 10 percent in the past two trading days.
Due to a better product mix and controlled expenditure, the company’s earnings before interest, taxes, depreciation, and amortization margins expanded 361 basis points year-on-year to 25.6 percent. Revenues grew 5.3 percent year-on-year at Rs 8,553 crore during the quarter and the company applauds the improved sales of Ilumya and Cequa.
ICICI Securities said, “Sun Pharma’s Q2FY21 results were above estimates on all fronts mainly on account of better than expected operational performance, tax gain on the creation of deferred tax assets, higher other income and lower interest expenses.”
The company’s US generic front is going through product rationalization. This shift is from generics to speciality segments and it looks promising due to the robust product pipeline and steady progress. The company said, a contribution from speciality and strong domestic presence will change the product mix and incur more remuneration for businesses in FY22.
Motilal Oswal Securities estimated earnings will increase by 22 percent and 5 percent for FY21/22E. It Is due to an increased contribution from the Specialty portfolio and lower OPEX for COVID’s extended period on accounts. The brokerage firms are riding high on Sun Pharma accounts and expect better performance from the Specialty portfolio.