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Informist, Monday, Oct. 28, 2024

 

--Sun Pharma Jul-Sept consol net profit INR 30.40 bln
--Analysts saw Sun Pharma Jul-Sept consol net profit INR 29.47 bln
--Sun Pharma Jul-Sept consol net profit INR 30.40 bln vs INR 23.76 bln
--Sun Pharma Jul-Sept consol revenue INR 132.91 bln vs INR 121.92 bln
--Sun Pharma Apr-Sept consol net profit INR 58.76 bln vs INR 43.98 bln
--Sun Pharma Apr-Sept consol revenue INR 259.44 bln vs INR 241.33 bln
--Sun Pharma Jul-Sept US formulation sales $517 mln, up 20.3% on year
--Sun Pharma Jul-Sept India formulation sales INR 42.56 bln, up 11% on year
--Sun Pharma Jul-Sept consol EBITDA INR 39.39 bln, up 23.9% on year
--Sun Pharma Jul-Sept consol EBITDA margin 29.6%
--Sun Pharma Jul-Sept global specialty sales $286 mln, up 19.2% on year
--Sun Pharma Jul-Sept emerging markets sales $293 mln, up 3.2% on year
--Sun Pharma Jul-Sept Rest of World Formulation sales $199 mln, down 3.5%
--Sun Pharma Jul-Sept R&D investments INR 7.93 bln vs INR 7.73 bln
--Sun Pharma Jul-Sept India formulations sales made up 32% of total sales
--Sun Pharma Jul-Sept API sales INR 5.34 bln, up 7.4% on year
--Sun Pharma Apr-Sept API sales INR 10.28 bln, down slightly on year

 

By Apoorva Choubey 

 

MUMBAI – Sun Pharmaceutical Industries Ltd. reported better-than-expected earnings for the September quarter, as the company's U.S. business, led by the specialty products pipeline, grew at a higher rate than estimated, at a time when the domestic business was strong. However, the pace of profit and revenue growth was the slowest in the last three quarters.

 

The drugmaker's consolidated net profit for Jul-Sept surged 28% on year to 30.4 billion, higher than the Street's expectation of INR 29.5 billion. The net profit growth was 43% in Apr-Jun and 34% in Jan-Mar.

Sun Pharmaceutical's consolidated net sales rose 9% on year to INR 132.9 billion during the reporting quarter, a tad higher than the consensus average estimate of INR 132.7 billion. This is the second quarter of sub-10% sales growth for Sun Pharma, after a 12-quarter-long double-digit sales growth streak was broken in Apr-Jun. 

In terms of operational performance, too, Sun Pharmaceutical fared well during Jul-Sept. The strong sales growth from the U.S. led to a better product mix for the company, which propped up the earnings before interest, tax, depreciation and amortisation, despite higher research and development spending, analysts said.

 

The company's consolidated operating profit surged 24% on year to INR 39.39 billion. The operating margin for Jul-Sept expanded to 29.6% from 26.4% a year ago, coming in at the higher end of the expected profitability by the Street. 

 

SEGMENTS

Growth in the high-margin market of the U.S. underpinned the strong performance during Jul-Sept. The region makes up over 33% of the company's sales and is deemed an even bigger contributor to profitability.

 

Sales from the company's US formulations business, including those from subsidiary Taro Pharmaceutical Industries, jumped 20% on year to $517 million. Analysts had expected the U.S. sales to rise 13% from a year ago. 

 

During the quarter, Sun Pharmaceutical was able to expand prescription volumes of key drugs such as Ilumya, Winlevi and Odomzo, in the U.S., even as some others like Cequa and Pentasa have seen low volumes. The growth would have been higher if not for some supply-related issues at the company's Mohali unit, said analysts.

 

The traction in these specialty drugs helped the drugmaker's global specialty sales jump 19% on year to $286 million. Brokerages had expected 15-17% growth in Sun Pharmaceutical's specialty drug sales.

 

"Sun (Pharma) has recently strengthened its specialty pipeline through an agreement with Philogen for commercializing late stage candidate Fibromun, upon approval," Chairman and Managing Director Dilip Shanghvi said in a press release. "With Fibromun, our product basket for dermatologists has expanded further," he said. Fibromun is an anti-cancer immunotherapy medication.  

 

For Jul-Sept, revenues from the other key market, India, rose nearly 11% on year to INR 42.6 billion, in line with expectations of 11-13% growth. The growth was presumably led by higher volumes, traction in the chronic portfolio, and the impact of sales force expansion in the recent past, analysts said.

 

India accounts for 32% of the company's total sales. Sun Pharmaceutical said it remains the industry leader in India's INR 2.2 trillion drug market, with a share of 8.1%, up from 7.7?rlier. 

 

The drugmaker's emerging markets sales rose 3.2% on year to $293 million, while Rest of World Formulation sales fell 3.5% to $199 million for Jul-Sept. Active pharmaceutical ingredient revenue rose over 7% from a year ago to INR 5.34 billion. 

OTHER METRICS
Sun Pharmaceutical spent INR 7.93 billion, or 6% of sales, on research and development during the September quarter. Analysts had expected R&D investments at around 6.9-7.6% of sales. In the year-ago period, the company had spent INR 7.73 billion on the same.

 

Raw material costs fell 1.6% on year to INR 16.4 billion while total expenses increased 4% to INR 100.5 billion. Tax outgo for the September quarter jumped 45% to INR 5.7 billion. 

 

On a quarter-on-quarter basis, the company's net profit rose 7% while net sales increased 5%. The company's shares extended gains a tad after the earnings. They ended 2% higher at 1,902.90 rupees on the National Stock Exchange.

 

The drugmaker's consolidated net profit for Apr-Sept surged 33.6% to INR 58.76 billion while revenue rose nearly 8% to INR 259.44 billion. The drugmaker's active pharmaceutical ingredient sales came in at INR 10.28 billion, slightly lower than last year.  End

 

US$1 = INR 84.07

 

Edited by Akul Nishant Akhoury

 

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