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Informist, Thursday, Aug 1, 2024

 

By Anshul Choudhary

 

MUMBAI – Sun Pharmaceutical Industries Ltd's bottomline for the June quarter was higher than expected due to increased sales in India and emerging markets, and slightly lower raw material costs. The company's consolidated net profit rose 40% on year to 28.36 bln rupees, above the Street's expectation of 26.10 bln rupees.

 

The company's net profit grew sharply as there was no exceptional cost this time. During the year-ago quarter, the company had reported a one-time cost expense of 3.23 bln rupees due to relocation costs, currency fluctuations, and impairment charges. The company's profit before exceptional items and tax was up 22% on year in the reporting quarter.

 

At the same time, its consolidated sales rose 6% on year to 126.53 bln rupees during the quarter, missing analysts' estimate of 128.60 bln rupees due to a slight drop in sales in the US. Sequentially, consolidated sales rose 5.6%, and the net profit was up 6.8%.

 

Segment-wise, formulation sales in India grew 16% on year to 41.45 bln rupees, accounting for 33.1% of the total sales. This is an improvement from the 30% contribution to sales in Apr-Jun last year. This growth was aided by six product launches during the quarter. The company has gained market share in India during the past year with its market share at 8.6%, compared to 8.3% last year. "We are seeing growth across therapies...majority of our growth is coming from volumes," the management said during its post-earnings conference call.

 

Sales from the company's US formulations business, including those from subsidiary Taro Pharmaceutical Industries, fell 1% to $466 mln. Taro Pharmaceutical has been merged with Sun Pharmaceutical, the company had announced in June. Among others, its sales in emerging markets were up 8.8% on year at $284 mln. Its rest-of-the-world formulation sales fell 2.9% to $190 mln. 

 

Global speciality sales rose 14.7% on year to $266 mln during the quarter, accounting for 17.1% of the overall sales. Sales of active pharmaceutical ingredients were down 8.3% on year at 4.95 bln rupees.

 

Profitability improved during the quarter, with the earnings before interest, tax, depreciation and amortisation margin at 28.5%, against 27.9% a year ago. EBITDA rose 8.3% on year to 36.08 bln rupees.

 

The company's expenses rose slightly slower than revenue, which aided profitability. Overall, expenses during the quarter rose 4.5% on year to 97.62 bln rupees. Its overall material cost, which includes cost material consumer, purchase of stock-in-trade, and inventory cost--fell 3% on year to 26.75 bln rupees.

 

The company spent 7.94 bln rupees on research and development during the quarter, up nearly 17% compared to a year ago. Sun Pharma reported its quarterly earnings during market hours today. Shares of the company were choppy post earnings and closed 0.2% lower at 1,715.20 rupees on the National Stock Exchange.  End

 

US$1 = 83.72 rupees

 

Edited by Aditya Sakorkar

 

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