Sun Pharma, Ci­pla Sales Fall in Q1

US & GST Lead­ing pharma cos saw slow growth in the US mar­ket and GST im­pact on rev­enues

The Economic Times - - Companies: Pursuit Of Profit - Our Bu­reau

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%.

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