Sun Pharma’s Q4 profit down 37%

India’s largest drug maker by sales Sun Pharmaceutical Industries posted 37% decline in consolidated net profit for the fourth quarter ended March 31, 2020 at Rs 400 crore as compared to Rs 636 crore in the same period last year. This is on account of a one-time loss of Rs 260 crore.

Sales from operations at Rs 8,078 crore was a growth of 15% over Rs 7,044 crore in same quarter last year.
Sales from India operations were Rs 2,365 crore. Sales for the same period last quarter included a one-time impact of approximately Rs 1,085 crore related to change in distribution for India business.
Adjusted for this impact, the company’s India sales grew 8% on year for the quarter.

EBITDA stands at Rs 1,465.24 crore in March 2020 up 12.86% from Rs 1,298.32 crore in March 2019.
Sun Pharma EPS has decreased to Rs 1.67 in March 2020 from Rs 2.65 in March 2019.
One of the key achievement of Sun Pharma is the ramp-up in its specialty division. Ilumya, among its key branded formulation products, logged sales of about $94 million in FY20, higher than estimates and therefore quite encouraging. US sales have also been encouraging, growing 7.1% sequentially to $375 million.

Sales of other specialty products drove the overall increase in global specialty sales by about $8 million. Some of its products have the potential for clocking higher sales in the next two years and analysts reckon that Ilumya could bring in about $145 million in sales in FY21.
In the coming quarters, however, growth may face a covid-19 challenge.
The company has filed six abbreviated-new-drug applications and received two approvals in the US. But weakness in generics continues, and is proving to be an overhang.

While Sun Pharma did well on the business front, rising costs from higher marketing and staff expenses have been disappointing.
Much of the company’s fortunes now hinge on a meaningful ramp-up in its specialty products. Margin growth could be slow given that marketing and sales promotional costs in coming quarters is likely to be high.

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