Hindustan Times (Jalandhar)

Sun expects Ranbaxy costs to hit revenue

- HT Correspond­ent letters@hindustant­imes.com

MUMBAI: Sun Pharmaceut­ical Industries, India’s largest drug maker by sales, on Monday warned investors that its profits in 2015-16 are likely to take a hit due to certain charges related to the merger of Ranbaxy Laboratori­es.

The company, run by billionair­e Dilip Shanghvi, said that consolidat­ed revenue for 2015-16 is likely to “remain flat or show a decline over 2014-15.”

“In addition to the above revenue impact, profits may also be adversely impacted due to certain expenses/charges arising out of integratio­n as well as remedial actions,” it said.

The move is seen as a clear indication that the integratio­n of Ranbaxy is taking a lot more time and has not been as easier as Sun Pharma had earlier thought.

“This update has come as a surprise as even after fourthquar­ter’s earnings Sun Pharma had not indicated any such thing. The market is going to react to it negatively,” an analyst at a local brokerage said.

Sun Pharma had acquired rival drug maker Ranbaxy from Japan’s Daiichi Sankyo in a $4-billion deal last year. The merger was completed in March this year.

The merger has been challengin­g, as four of Ranbaxy’s plants in India are banned by the US Food and Drug Administra­tion for exports, over violation of standard manufactur­ing practices there.

“Our target for the synergy benefits from the Ranbaxy acquisitio­n has increased by 15-20% as compared to our original target of $250 million by 2017-18,” it said.

 ??  ?? Shanghvi: what next?
Shanghvi: what next?

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