Q2 Results: Sun Pharma Posts Surprise Loss Due To Anti-Litigation Provision
Sun Pharmaceutical Industries Ltd. reported an unexpected loss for the quarter ended September due to a one-off anti-trust litigation provision.
The company posted a net loss of Rs 219 crore against the Rs 912 crore profit reported in the year-ago period, the country’s largest drugmaker said in an exchange filing. That compares with the Rs 1,045-crore profit consensus estimate of analysts polled by Bloomberg.
The company posted a one-time loss of Rs 1,217 crore for the estimated settlement amount payable to all the remaining plaintiffs in an antitrust litigation related to sleep disorder drug modafinil in the U.S.
Sun Pharma, Teva Pharmaceutical Industries Inc., and other companies have been alleged of entering into an illegal agreement to keep generic versions of modafinil, sold by Cephalon Inc. under the brand name Provigil, off the market, according to a Bloomberg Legal News report.
Revenue in the July-September period rose 4 percent to Rs 6,938 crore year-on-year—lower than the Rs 7,600 crore estimated by analysts.
Operating income or the earnings before interest, tax, depreciation and amortisation rose 11 percent to Rs 1,531 crore. The operating margin expanded 180 basis points to 22.5 percent.
“Our soft Q2 performance is not a reflection of the underlying health of the overall business,” said Dilip Shanghvi, its managing director. “We continue to focus on strengthening our core operations and enhancing our overall efficiencies.”
Shares of the company fell 4.7 percent to Rs 561.70 apiece ahead of the earnings announcement.