At Rs 815 odd, how do you see the valuation on the stock versus the kind of delivery they have done?
We will see some more upgrades coming in with this quarterly number and in terms of performance, India and US both would be driving this quarter’s performance. In terms of numbers, these numbers are at the top line as well as at the EBITDA level, they are slightly ahead of our expectations. But these are very good quarterly numbers.
The upgrade cycle will continue and I see a very good performance delivered. We had around Rs 1800 odd PAT estimates whereas they have delivered around Rs 2,000 plus and that is definitely a beat on our numbers.
Going ahead we will have to look at Sun Pharma in a different way. What is happening to speciality, what is happening to base business, what is happening to India business because each of them have become sizable?
Yes, and it has always been like that and now speciality, specifically forms a separate zone for us whereas they are the leaders in India. So growth has not been a concern for us. Growth has been fabulous for their domestic business and specifically this quarter anti infective recovery is very strong for the peers and the Ranbaxy part of the portfolio is doing well, supporting growth for this quarter despite a slightly weak chronic segment.
In India business, they are definitely the leaders. And with the US speciality delivering the way it has been, it becomes a different segment for them and a growth engine for the company going ahead.
These things are very much material and I think this is how it is going to be going ahead as well as the EMs performance also should be better than expected, considering all other peers where EMs have performed better than expected. It is an overall super pack performance.
What are the few things that you would look at?
Definitely speciality, how it is panning out and of course what is the outlook over the newer Winlevi which is now available. If we can get some handle on what kind of peak revenues we can look at as well as the new Ilumya’s trajectory and at what pace it can grow.
US speciality will remain in focus and with that, the cost of the speciality also is coming in base. So we will look out for how the cost parameters will move ahead and how much of further EBITDA delta we can see on the EBITDA level coming from better sales deliverance in the US speciality segment would drive much higher delta for EBITDA.
These are the few parameters which we will look at and in India business, we will definitely look at a strong shift given the weak base that we have thanks to Covid pandemic in the earlier quarter.
