Sun Pharma Feels US Slowdown Pinch, Profit Declines 5%
Co’s income from operations increases 8% to .₹ 7,683 crore
Mumbai: The impact of a slowdown in its US business is beginning to show on the performance of India’s largest drug maker Sun Pharmaceutical Industries, with the company reporting a 5% on-year decline in its net profit in the December quarter.
Sun’s net profit declined to .₹ 1,472 crore in the quarter, with the Mumbai-based company’s income from operations increasing 8% to .₹ 7,683 crore, compared with .₹ 7,087 crore in the same quarter last year. The US market, which contributes about 45% of Sun’s sales, registered a 4% growth to $507 million. The company’s sales growth in the US was led by the generic Olmesartan, a bloodpressure-controlling drug, and the continuity of the 180-day exclusivity push for anti-cancer drug Imatanib. Sun Pharma’s US sales were also affected by a revenue drop at its subsidiary Taro Pharma: In the justconcluded quarter, Taro reported sales worth $220 million, down 15% on-year. Taro’s net profit also fell 26% to $140 million. Sun Pharma’s India business was also affected as the demonetisation woes hit the market leader along with its local pharma peers.
Sale of branded formulations in India was .₹ 1,969 crore, up 5%, with the home market making up 26% of Sun Pharma’s revenues. However, the poor showing in India and US was offset by the company’s emerging-markets revenues, which reported a 14% sales growth at $172 million. The earnings before interests, tax, depreciation and amortisation (EBITDA) was at .₹ 7,575 crores, resulting in an EBITDA margin of 32%. During the quarter, Sun Pharma commercialised BromSite, its first specialty eye care product in the US, Dilip Shanghvi, managing director of Sun Pharma, said. He also noted positive results in the Phase-3 trials for Seciera, its drug for the dry-eye syndrome. Sun last year also acquired the anti-cancer brand Odomzo, an indicated treatment for adult patients of skin cancer.