Sun Pharma(SUNP) Earnings for the first quarter of 2010 / EBITDA / PAT estimated a consensus of 11% / 30% / 40 as all businesses exceeded expectations as Covid’s tailwind supported a structural recovery. % Exceeded.
Upgrade SUNP to “Purchase”. i) Ilumya outperformance and Cequa’s strong recovery to mitigate Absorica’s loss. b) Winlevi’s boost to the dermis portfolio to monetize Absorica’s sales force. c) With the launch of gRevlimid in 2011, widespread growth in India, the rise of Winlevi, and special acceleration, it will be converted to a margin of 30% or more in 2012.
Increase FY23E EPS by 27% with core business improvements, gRevlimid and Winlevi. Increase the multiple by 28 times with integrated EPS to account for short-term extraordinary losses with a modified SOTP-based TP of £ 950.
Key points for Q1 2010 — Strong all-round performance: All businesses were above expectations, 11% above the top line. The United States is $ 380 million. Best performance in 9 quarters promoted by Ilumya, which mitigated the effects of generics of Absorica. Ilumya doubled year-on-year according to secondary data. Former Covid India has grown by double digits. Although the generic version of Absorica reduced gross margin slightly, managing employee costs and operating costs resulted in an EBITDA margin of over 28.4%.
Proactive Growth as Specialty Builds Confidence: With the exception of the genericization of Absolica, which is expected to trough out in the coming quarters, SUNP has a 20% CAGR; Eli Lilly-led specialty portfolio (Chart 3). When Lilly disposes of Millikizumab, potential competition is reduced. Winlevi recognizes that it may face commercial hurdles, but throughput can be very high as no new investments are made.
Cequa is expected to become the fastest growing molecule, with strong growth through FY2011 as Restasis generics hit the market, and eventually peaking out. The launch of gRevlimid in the second half of 2011 should provide comfort for US base businesses. The recovery of the former Taro business in the United States, steady growth of EM and RoW, strong domestic chronic business, and visible cost control could bring comfort to the base business.
Outlook and Rating: Higher revenue visibility. Upgrade to “Purchase”. FY22 / 23E Increase EPS by 11% / 27%, factoring in gRevlimid and Winlevi into forecasts and expanding margins as your area of expertise expands. The target multiple for EPS in December 2022E is 28 times (from 25 times). This is because the best economics of the discipline are likely to be seen only in May 2014. Based on December 28, 2022E and gRevlimid £ 20, we will raise TP to £ 950 (from £ 675).
Upgrade Sun Pharma to “Purchase” and get a TP of £ 950.
https://www.financialexpress.com/market/upgrade-sun-pharma-to-buy-with-tp-of-%E2%82%B9950/2303473/ Upgrade Sun Pharma to “Purchase” and get a TP of £ 950.