Sunpharma vs Sbilife Q1 FY24

Sun Pharma reported Q1 FY24 consolidated revenue of INR 11,785 crore, up 10.7% YoY, driven by US specialty growth (up 21% to $232M) and episodic lenalidomide sales. EBITDA grew 14.7% to INR 3,308 crore, with margins at 27.8%. India formulation sales grew 5.1% to INR 3,560 crore, impacted by NLEM and sitagliptin patent expiry. US generic sales rose 12% to $471M, but Mohali supplies remain suspended. Specialty pipeline advanced: GLP-1 agonist GL0034 showed promising Phase I data; ILUMYA Phase III for psoriatic arthritis accelerated; deuruxolitinib 8mg continues as planned. R&D spend was INR 680 crore (5.8% of sales). Management expects India growth to align with market in coming quarters. Key risk: Mohali plant restart timeline remains uncertain, potentially impacting US generic revenue.

Guidance read

R&D spend guidance maintained at ~6-7% of sales for FY24: Management reiterated full-year R&D guidance, with potential updates if needed. Concert Pharma costs are included. India business to grow in line with or better than market in coming quarters: CEO Kirti Ganorkar expressed confidence that India formulation growth will align with IPM growth, recovering from NLEM and sitagliptin impacts. Lenalidomide sales expected to remain episodic: CFO noted that lenalidomide sales were significant in Q1 but will be episodic going forward, not a steady revenue stream. Deuruxolitinib 8mg filing on track; no slowdown in OLE studies: Management confirmed that the partial clinical hold on 12mg has been lifted, and 8mg dosing continues as planned with no delays.

Risk read

Key risks include Mohali plant supply suspension continues — Supplies from Mohali have not resumed; residual inventory sales are declining. Market share loss may be permanent depending on competition and contracts.; India market share decline and NLEM impact — India market share fell to 8.33% from 8.5% due to NLEM price cuts and sitagliptin patent expiry. Recovery timeline uncertain.; Taro acquisition uncertainty — Management provided no update on the Taro minority buyout beyond forming a special committee. Strategic benefits remain unclear.; Specialty R&D pipeline execution risk — Multiple Phase II/III trials (ILUMYA PsA, deuruxo, GLP-1) require significant investment. Failure or delay could impact returns..

Promise ledger

Scorecard data is being built as historical quarters are processed.

SBI Life reported a decent Q1 FY24 on a high base, with individual new business premium growing 18% YoY to INR 40.6 billion and PAT up 45% YoY to INR 3.8 billion. Growth was driven by strong annuity (individual annuity up 129%) and ULIP traction, while non-par savings saw a temporary dip due to last year's pent-up demand. VNB margin came in at 28.8%, down from 30.2% in Q1 FY23, primarily due to product mix shift. Management reiterated a 20-25% growth aspiration for FY24 and expects margins to remain range-bound around 28-30%. Key risks include potential upward pressure on distributor commissions following regulatory changes (EOM guidelines) and a slight dip in 13-month persistency to 85.1%.

Guidance read

FY24 growth aspiration of 20-25%: Management expects to deliver better than industry growth, targeting 20-25% growth in individual rated premium for FY24. VNB margin to remain range-bound around 28-30%: Management expects VNB margins to stay in the 28-30% range, with no significant expansion or compression expected. Non-par share expected at 24-25% of business: CFO indicated non-par share should normalize to around 24-25% of business for the full year, similar to FY23.

Risk read

Key risks include Potential margin pressure from increased distributor commissions — Regulatory changes (EOM guidelines) may lead to higher commission payouts, especially to SBI, potentially compressing VNB margins.; Persistency decline in near-term cohorts — 13-month and 25-month persistency dipped slightly, which could impact future renewal premiums and embedded value if not reversed.; High base effect may constrain growth in coming quarters — Last year's exceptional Q1 growth (86% in individual rated) creates a high base; sustaining 20%+ growth for the full year requires strong performance in subsequent quarters..

Promise ledger

Scorecard data is being built as historical quarters are processed.