Sun Pharmaceutical Industries is scheduled to release its third quarter results later today, and the company is seen reporting a moderate growth in earnings due to muted growth in both US and India revenue.

While focus will be on the performance in the December quarter, analysts will also track other factors such as growth in the US business, arm Taro Pharmaceutical’s performance, margin trajectory, planned product launches, and investments towards research and development.

Core Earnings

The drugmaker is expected to report a nearly 8% year-on-year (YoY) growth in consolidated net profit to Rs 2,329 crore, according to the average of estimates given by six brokerage firms.

Consolidated revenue is seen rising 9% YoY to Rs 12,265.40 crore, and operating profit may grow 7% to Rs 3,208.40 crore, the estimates showed.

US Business

Analysts expect US revenue to rise by around 4% sequentially in constant currency terms to $450 million, driven by specialty sales and gradual uptick in shipments from the Mohali site. The US specialty business is largely expected to see a 10% growth sequentially. Formulation sales in the US grew 4.2% YoY to $430 million in the September quarter, and accounted for over 30% of the consolidated sales of the company.

India/Rest of World

Nuvama Institutional Equities expects domestic formulations to grow at a healthy rate of 11% YoY due to addition of field force, albeit on a weak base.

The India formulation sales grew by over 11% YoY in the September quarter to Rs 3,843 crore, and it accounted for about 32% of the consolidated sales of the company.

R&D Spend

Investments towards research and development will be closely monitored by analysts.

Consolidated R&D investment in the September quarter was Rs 773 crore or 6.4% of sales. In the first half of FY24, R&D expense was Rs 1,453 crore or 6.1% of sales.

Other Monitorables

An update on potential launch pipeline over the next 12-15 months, and outlook on R&D spend for FY24 and beyond, based on the projects undergoing different phases of clinical trials, will be eyed by investors and analysts.

The board is also expected to consider and recommend an interim dividend payout for the current financial year.

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