Sun Pharma’s Q2 revenue may grow in double-digit YoY; stock hits new record high after 7 years

Sun Pharma Q2 Result: Drug maker Sun Pharmaceutical is scheduled to report good second-quarter earnings for the financial year 2022-23 (Q2FY23) on Tuesday, November 1, 2022. Shares of pharma major hit a new record high on Monday almost after seven years, it has entered into four-digit number territory.

Q2 Result 2022 Likely To Be Good

According to Zee Business estimates, the company’s revenue may come at Rs 10,808 crore, and profit after tax at Rs 1.964.7 crore, while EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortisation) is likely to be at Rs 2781.7 crore and, margins around 25.7 per cent in Q2.

Zee Business report also stated that the decline in earnings is due to price erosion and a one-time adjustment in the US.

Meanwhile, ICICI Securities said in its preview report, “Revenues are likely to grow around 15.8 per cent year-on-year (YoY) to Rs 11,144.6 crore, mainly on the back of 13 per cent growth in domestic formulations to Rs 3,602.2 crore and 27 per cent growth in the US to Rs 3,410.7 crore.”

EBITDA margins are likely to decline 32 basis points to 27 per cent while EBITDA is expected to post growth of 14.4 per cent YoY to Rs 3,009.1 crore and adjusted PAT may remain flat YoY to Rs 2,051.0 crore, the domestic brokerage said in its preview report.

Sun Pharma Share Price Historical Data

The Sun Pharma stock retained a four-digit figure on last Thursday for the first time after seven years, however, it declined during Friday’s trade. On Monday, the scrip again breached 1000-mark and touched a new record high at Rs 1,027.10 per share on the BSE.

The counter on Monday closed as one of the top gainers on the BSE up over 2.5 per cent to Rs 1015.95 apiece as compared to 1.3 per cent rise in the S&P BSE Sensex. Sun Pharma's share price has risen over 25 per cent in the last one year, while almost 20 per cent year-to-date.

If analysed, the share price of pharma major has not gone anywhere, rather it has returned near to its previous high touched 7 years ago. The scrip on Monday breached a previous high of Rs 1,119.75 per share on April 10, 2015.

In comparison, the net worth or wealth of Sun Pharma’s promoter has also been stagnant in terms of growth in the last seven years, unlike other Indian billionaires.

According to Bloomberg Billionaires Index, the Promoter of Sun Pharma Dilip Shanghvi has a net worth of $15.5 billion and is at 93rd position in the richest people’s list in the world. The Mumbai-based company has more than 40 manufacturing facilities and serves more than 100 countries, as per Bloomberg.

The stock is reacting to positive news, such as settling of related party transactions and among others, TradeSwift Director Sandeep Jain said. He added, the overall pharma sector was not doing well mainly due to challenges in the US, however lately, the sector’s performance is improving.

He expects the second quarter results, which are scheduled for tomorrow may also be good, the previous quarter results were also better YoY. He advised investors to wait as good results are discounted and advised to be cautious with a target price of Rs 1200/1250 on a long term.