Sun Pharma Q3 Results: Profit Falls 27% On Higher Costs, Lower Other Income
Sun Pharmaceutical Industries Ltd.’s quarterly profit missed analysts’ estimates as other income fell and costs rose.
Net profit of India’s largest drugmaker fell 27 percent year-on-year to Rs 914 crore in the quarter ended December, according to an exchange filing. That compares with the Rs 1,054-crore consensus estimate of analysts tracked by Bloomberg.
Other income declined 40 percent year-on-year to Rs 120 crore. Input costs rose around 5 percent to Rs 1,495.7 crore. Other expenses jumped 22 percent over a year earlier to Rs 2,646 crore, including a 15 percent rise in research and development expenses to Rs 518 crore.
Revenue rose 5 percent over the previous year to Rs 8,155 crore against the Rs 8,228-crore forecast. The top line was aided by the company’s acquisition of Japan’s Pola Pharma.
Sun Pharma’s operating profit declined 14 percent over last year to Rs 1,842 crore in the three-month period. Operating margin shrank to 22.6 percent from 27.8 percent in the same quarter last year.
Our branded business in India is doing well and has recorded double-digit growth, for Q3 as well as for the nine-month period. For the international business, we continued our efforts to enhance our portfolio in new markets by entering into a licensing agreement with AstraZeneca in China for some of our novel oncology products.Dilip Shanghvi, Managing Director, Sun Pharma
This comes as the domestic business grew 13 percent to Rs 2,517 crore in the three-month period—surpassing the estimate of 11 percent. The U.S. business, however, declined 3 percent to $350 million.
The numbers are in line with street expectations, said Shrikant Akolkar, research analyst at Ashika Stock Broking. “However, we remain neutral on the stock as the U.S. buisness is yet to fire profitability with a lot of efforts put into building the speciaility business.”
The board declared an interim dividend of Rs 3 per share, with Feb. 18 as the record date. Shares of the drugmaker rose 2.8 percent after the earnings announcement compared to 0.4 percent gain in the Nifty 50 Index.