Top India Drugmaker Profit Rebounds as Virus Impact Eases

(Bloomberg) -- Sun Pharmaceutical Industries Ltd.’s quarterly profit rose 71% and beat estimates as a recovery in hospital visits and medicine prescriptions helped India’s biggest drugmaker rebound from a surprise loss in the preceding quarter.

Mumbai-based Sun Pharma posted a net income of 18.1 billion rupees ($243.3 million) for the quarter ended Sept. 30, compared to the 11.31 billion-rupee profit estimate in a Bloomberg survey of analysts. Revenue rose 5.3% to 85.5 billion rupees compared to the year-ago period, according to a filing on Tuesday.

The drugmaker, helmed by billionaire Dilip Shanghvi, saw a pickup in sales as patients started visiting doctors and hospitals again for routine checkups as well as surgeries after avoiding them for months due to lockdowns or the fear of coronavirus infection. The rebound boosted Sun’s portfolio of generic drugs, many of which are used to treat chronic ailments in its two top markets -- the U.S. and India -- which also have the world’s two biggest Covid-19 outbreaks.

Sun has seen a “gradual recovery in all our businesses compared to quarter one, despite market conditions that have not fully normalized,” Shanghvi said in a statement. “Sales of our specialty products have improved sequentially with Ilumya and Cequa reaching pre-Covid levels,” he said, referring to the company’s skin and eye disease drugs.

‘Underlying Strength’

While sales in India and the U.S. were flat compared to a year ago, emerging market and other world revenue grew at 4.5% and 10%, respectively.

The turnaround comes after Sun Pharma’s subsidiary, Taro Pharmaceutical Industries Ltd., agreed to pay in July almost $480 million to settle drug-price fixing allegations in the U.S. It included criminal charges that the company conspired with competitors to rig the prices of generic drugs between 2013 and 2015.

Sun Pharma’s shares rose about 3.5% in Mumbai on Tuesday, pushing this year’s increase to 12.3%. The benchmark S&P Sensex has slipped 2.4% this year.

“This quarter has been phenomenal for Sun Pharma” despite an increase in operating expenses and research and development costs, said Bharat Celly, an analyst at Equirus Securities Ltd. in Mumbai. “This quarter is indicative of underlying strength in the business.”

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