Sun Pharma Q2 Results Preview: revenues to be supported by the healthy US and domestic sales

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Sun Pharmaceutical Industries is expected to report a strong rise in sales for the quarter ending September helped by healthy contributions from the US as well as the domestic formulations markets. Analysts at PhillipCapital India Research expect Sun Pharma to report 10% sales (revenue) growth on account of continued contributions from multiple myeloma treatment drug Revlimid generics in the US, sustained growth in the US specialty business as well as growth in the domestic formulations business. This is despite muted performance by Taro (Sun Pharma’s US Subsidiary) and impact of import alerts, said analysts at Phillip Capital.

The contributions from Revlimid Generics are pegged at $40 million, during the quarter, while US specialty business is likely to clock 19% year-on-year growth. Domestic formulation sales are expected to stay strong at 8% year-on-year. Sun Pharma has been developing and building on its specialty product portfolio to drive growth in the US market, amidst pricing pressure in the generics segment.

The US generics segment, nevertheless, is currently seeing stable pricing amidst lower competitive intensity due to drug shortages in the US. The stable pricing scenario is likely to continue for a few quarters, as per analysts. Meanwhile, the specialty portfolio of Sun Pharma is also supporting growth in the other international markets.

Also Read- L&T share price rises after strong Q2 results; brokerages raise target price on stock However, developing and launching new products in the Specialty segment is also keeping R&D costs elevated for the company. It is the higher R&D expense and higher remediation costs may keep Sun Pharma’s EBITDA growth under check. Sun Pharma’s manufacturing facilities at Halol In