Sun Pharma's first-quarter sales, profit rise, topping forecasts

Headline results for the first quarter:

Revenue

INR 82.6 billion ($1.2 billion; forecasts of INR 81.2 billion)

+16%

Profit

INR 13.9 billion ($195.2 million; forecasts of INR 10.8 billion)

+31%

Note: All changes are versus the prior-year period unless otherwise stated

What the company said:

"We have recorded growth across most of the markets for the quarter and our performance is in-line with our full-year guidance," remarked managing director Dilip Shanghvi.

He stated "we are consistently focusing on improving our efficiencies and cost structure to ensure reasonable returns for our generics business," adding "at the same time, we continue our unwavering efforts on building the specialty business and are encouraged by the potential of one of our pre-clinical research molecules, which is likely to enter clinical trials next year."

Shanghvi further commented that "the recent out-licensing of tildrakizumab and Cequa for the Greater China market, and the regulatory filing of tildrakizumab in Japan, reflects our global aspirations for the specialty business," while "Ilumya/Ilumetri is gradually gaining traction in the US and Western Europe."

Other results:

  • US finished dosage sales: $424 million, +12%, fuelled by "the contribution from a significant business of generic supply to a customer"
    • Taro Pharmaceutical sales: $161 million, +4%
  • India sales: INR 23.1 billion ($324.3 million), +8%
  • Emerging markets sales: $194 million, flat versus prior year, with revenue growth suppressed by unfavourable currency impacts
  • Rest of world sales: $167 million, +56%, driven by organic initiatives and the consolidation of the Pola Pharma business
  • Active pharmaceutical ingredient sales: INR 4.6 billion ($65 million), +17%

What analysts said:

SBICAP Securities' Kunal Dhamesha remarked "the better-than-estimated result is primarily due to the new business opportunities they had spoken about in the fourth quarter, so I think there is some addition to the run rate they had in the US in quarter four." The analyst noted that the normalisation of a one-time charge linked to business restructuring also bolstered profit.

Meanwhile, Reliance Securities analyst Krishnanath Munde said Sun Pharma's "numbers are better than our estimates," adding that "even excluding the Taro business, numbers are extremely good and well ahead of expectations. Growth drivers for revenue were India, the US and rest of world."

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