Sun Pharma, Cipla Sales Fall in Q1
US & GST Leading pharma cos saw slow growth in the US market and GST impact on revenues
Mumbai: Sun Pharma and Cipla, India’s two leading pharma companies, on Friday reported lower-thanexpected quartely numbers, dragged down principally by the Goods and Services Tax (GST) rollout and slow growth in the US markets.
Sun Pharma, the country’s largest drug maker, reported sales of ₹ 6,127 crore, down 23% year-on-year (YoY), while Cipla, India’s third largest in the pharma space, reported net sales of ₹ 3,525 crore, a decline of 3% YoY.
Sun’s underperformance was attributed primarily to a one-time settlement of ₹ 950 crore over the anti-trust litigation of the Modafi- nil drug. The GST rollout also led to a 5% YoY drop in the company’s domestic sales to ₹ 1,761 crore. Dilip Sanghvi, MD, Sun Pharma, acknowledged the slow growth, and said the company was expecting things to improve in the coming quarters. “Our Q1 performance was not good, and not in line with our past performance, due to the combined impact of increasing investments in our global specialty business, temporary disruption in our India business due to the GST implementation, a challenging US generic pricing environment and the Modafinil settlement. We expect our performance to gradually improve in the second half of this year,” Sanghvi said. Sun Pharma’s shares closed on Friday at ₹ 451, down by 2%. The US markets, which contribute to over 40% to Sun’s overall business, came at $351 million, down 42% YoY. The numbers fell as the company’s 180-day exclusivity of its anti-cancer drug, Imatinib, had been achieved in previous quarters. The bright spot for the company was in emerging markets where the company reported 9% growth. Sun’s earnings before interest, depreciation and tax came at ₹ 1,054 crore, with a margin of 17%.
Cipla reported a 3% YoY drop in net sales at ₹ 3,525 crore, though its net profit grew by 22% YoY to ₹ 409 crore.
Cipla’s shares at the end of Friday’s trade closed at ₹ 543, down 1.13%.