Sun Pharma

Sun Pharma posted upbeat Q1FY16 numbers. Though the consolidated net profit of the company has come in 46% (QoQ) down at Rs.479 crore, this drop in profit has been mainly on account of the one-time exceptional loss of Rs.685 crore which is on account of impairment charges on account of the merger. The EBITDA has more than doubled from Rs.792 crore to Rs.1860 crore and margins have come in at 27.5% v/s 13%. This was a clear indication that but for the one-time loss, the company would have notched up a very credible performance. And that is what the market has decided to look and ignore the impairment loss.

The company’s finished dosage sales in Q1 was down 4% (YoY) at US$488 million – impacted due to competitive pressure on some products and temporary supply constraints arising from remediation efforts at the Halol facility. It has a strong pipeline of 159 awaiting approvals in US FDA. Emerging markets sales was down 15% at US$133 million – impacted due to currency fluctuations and Rest of World was down 7% at US$91 million – the company is making a conscious effort at reducing the participation in non-remunerative businesses has contributed to de-growth in the business. ROW markets accounted for approximately 9% of revenues for Q1 FY16. The R&D spend during the quarter has risen 37% at Rs.511 crore. The company has strengthened its ophthalmology and OTC teams in the US as well as formed a dedicated team for MK-3222, its IL-23 anti-body which is currently undergoing Phase-III clinical trials. Sun Pharma is ranked No. 1 and holds approximately 8.9% market share in the Rs. 90,000 crore pharmaceutical markets as per June-2015 AIOCD-AWACS report. Taro recently posted Q1 FY16 sales of US$ 215 million, up 65% from the corresponding quarter last year. Taro’s net profit for Q1 was US$ 104 million, up by 125% over Q1 last year.