Please Share:: 
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Sun Pharma
Taro spearheads the growth
Mr. Uday Baldota and Mrs. Mira Desai from Investor Relations
department shared their outlook on the industry and the company
Key Highlights
§ Domestic formulation (contributes ~40%) to growth at a healthy rate (we estimates
18% CAGR over FY11-FY13) on back of new sustained product launches and
leadership in chronic therapy.
§ Under the Sun-MSD JV - Sitagliptin Sitagliptin + Metformin combination have been
launched. Sun Pharma has rights to market, promote and distribute in India under
different brand names, Istavel & Istamet
§ The company also launched a dry powder inhaler for the asthma patients in India
§ US business to show robust growth on the back of Para IV opportunities, upsides
from Taro and launch of recently approved 15 ANDAs in H1FY12. Majority of the
approvals for Sun Pharma in US has been in areas of dermatology, CNS, CVS and
Pain
§ Sun Pharma launched Taxotere (current market size of $200m with 4 generic
players) generics during the current year. The pick-up in market share has been
below market expectations.
§ Integration of Taro’s US business would add a well-established portfolio of
dermatology and pediatric products to Sun’s portfolio which do not overlap with Sun’s
core portfolio. Any developments for Taro will add additional upside to our
projections. Management has guided for R&D spends to increase at Taro in the
coming quarters
§ Warning letter on Caraco still looms over Sun Pharma. However, historically Sun has
been able to resolve the warning letters issued to its Cranbury facility and Taro’s
Canadian facility. These instances vindicates sooner clearance of Caraco facility as
well.
§ Sun has 388 ANDA filings (including 12 ANDAs filed in H1FY12; also includes
Cardizem CD 360mg strength where Sun is the only player in US$75mn market) till
date with 150 ANDAs pending for approval (includes 18 tentative approvals), highest
number of filings by an Indian pharma company. Management has guided for 25
ANDA filings during FY12
§ Going forward –
§ Management has maintained its guidance of 28-30% growth in top-line for FY12
§ Generic R&D ~6% of overall sales
§ Capex of USD100mn
Valuation
We expect Sun Pharma to report 28% growth in revenues in FY12E and 24% growth in
FY13E. EBIDTA margins are expected to decrease from 34.8% in FY11 to 34.5% in
FY12E and 37.4% in FY13E. Earnings will grow by 27% CAGR over FY11-13E. We
revise our target price to Rs554 (22x FY13E core earnings of Rs23). At CMP, the stock
trades at 23x FY12E and 18x FY13E EPS. Maintain Accumulate.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Sun Pharma
Taro spearheads the growth
Mr. Uday Baldota and Mrs. Mira Desai from Investor Relations
department shared their outlook on the industry and the company
Key Highlights
§ Domestic formulation (contributes ~40%) to growth at a healthy rate (we estimates
18% CAGR over FY11-FY13) on back of new sustained product launches and
leadership in chronic therapy.
§ Under the Sun-MSD JV - Sitagliptin Sitagliptin + Metformin combination have been
launched. Sun Pharma has rights to market, promote and distribute in India under
different brand names, Istavel & Istamet
§ The company also launched a dry powder inhaler for the asthma patients in India
§ US business to show robust growth on the back of Para IV opportunities, upsides
from Taro and launch of recently approved 15 ANDAs in H1FY12. Majority of the
approvals for Sun Pharma in US has been in areas of dermatology, CNS, CVS and
Pain
§ Sun Pharma launched Taxotere (current market size of $200m with 4 generic
players) generics during the current year. The pick-up in market share has been
below market expectations.
§ Integration of Taro’s US business would add a well-established portfolio of
dermatology and pediatric products to Sun’s portfolio which do not overlap with Sun’s
core portfolio. Any developments for Taro will add additional upside to our
projections. Management has guided for R&D spends to increase at Taro in the
coming quarters
§ Warning letter on Caraco still looms over Sun Pharma. However, historically Sun has
been able to resolve the warning letters issued to its Cranbury facility and Taro’s
Canadian facility. These instances vindicates sooner clearance of Caraco facility as
well.
§ Sun has 388 ANDA filings (including 12 ANDAs filed in H1FY12; also includes
Cardizem CD 360mg strength where Sun is the only player in US$75mn market) till
date with 150 ANDAs pending for approval (includes 18 tentative approvals), highest
number of filings by an Indian pharma company. Management has guided for 25
ANDA filings during FY12
§ Going forward –
§ Management has maintained its guidance of 28-30% growth in top-line for FY12
§ Generic R&D ~6% of overall sales
§ Capex of USD100mn
Valuation
We expect Sun Pharma to report 28% growth in revenues in FY12E and 24% growth in
FY13E. EBIDTA margins are expected to decrease from 34.8% in FY11 to 34.5% in
FY12E and 37.4% in FY13E. Earnings will grow by 27% CAGR over FY11-13E. We
revise our target price to Rs554 (22x FY13E core earnings of Rs23). At CMP, the stock
trades at 23x FY12E and 18x FY13E EPS. Maintain Accumulate.
No comments:
Post a Comment