Sun Pharma's Q2 Profit Plunges 59%, Beats Estimates

Tuesday, 14 Nov, 2017

Analysts had expected a profit of 8.27 billion rupees, Thomson Reuters data shows.

Sun Pharmaceutical Industries Ltd, country's largest drugmaker, posted a 59 per cent plunge in second-quarter profit on Tuesday, but beat estimates.

"A challenging US generic pricing environment, coupled with continued investments in building our global specialty business, has impacted our second quarter performance", Dilip Shanghvi, managing director of Sun, said in the statement.

The company reported net profit of Rs 2235 crore in the same period of previous year. "We expect it to gradually improve in the second half of this year".

US sales for the quarter fell 44 percent to $309 million while sales from India rose 11 percent.

Sales in the USA fell 44 percent to United States dollars 309 million in the second quarter.

Sun and smaller rivals are grappling with falling drug prices in the USA, where the Food and Drug Administration has expedited its approval rate for generics, paving the way for increased competition from new players.

Shares of Sun Pharmaceutical Industries today closed 1.19 per cent lower at Rs 526.15 apiece on BSE. For Q2FY18, the company launched 14 new products in the Indian market.

The emerging market sales rose 16 percent to Dollars 196 million for Q2 led by broad-based growth across various markets, and was also partly boosted by the consolidation of the Biosintez acquisition in Russian Federation. The firm's rest of the world sales were $111 million, which grew by 40 per cent over Q2 previous year.

Active Pharmaceutical Ingredients external sales were at Rs 388 crore for second quarter of the current fiscal, up 6 per cent from the corresponding period of the previous fiscal, Sun Pharma said.

"This R&D expenditure includes investments on account of funding the clinical development of our global specialty pipeline." the company said. According to media reports, starting Tuesday, the USA drug regulator is conducting a surprise inspection at another plant in Baska, near Halol, that manufactures several injectable drugs the company filed for approval in the U.S.