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Sun Pharma Q3 net profit down 7%

Failing to meet street expectations, India’s largest drug manufacturer Sun Pharma has reported a decline of nearly 7% in its net profit in the third quarter of the current fiscal at Rs 1,425.07 crore compared to Rs 1531.09 crore in a year ago period.

Net sales for the quarter under review remained almost flat at Rs 4279.54 crore as against Rs 4286.59 crore in a year ago period.

EBITDA at Rs 1,913 crore de-grew by 3% as a consequence of which EBITDA margin stood at 45% as against 46% in a year ago period.

Sales in the US were $ 413 million for the quarter, down by 5%, accounting for 59% of total sales for Sun Pharma. According to the Mumbai based company, US sales for the quarter under review were impacted primarily due to temporary supply constraints arising from remediation efforts.

Commenting on the results, Dilip Shanghvi, MD of the company, said, “Our Q3 performance reflects our ability to maintain strong profitability despite temporary supply constraints resulting primarily from the on-going compliance efforts. We are currently maintaining our FY15 sales guidance.”

The company maintained a good show in domestic market with branded generic sales in India at Rs 1,150 crore, up by 21% compared to year ago period.

Taro recently posted Q3 sales of $ 238 million, up by 11% from the corresponding quarter last year. Taro’s net profit for Q3 was $ 143 million, up by 23%% over Q3 last year.

Formulation sales in international markets, excluding US market accounted for $ 72 million in the quarter under review, registering a de-growth of 15%.

Sun Pharma, which is in the process of acquiring ailing drug firm Ranbaxy, secured US FTC (Federal Trade Commission) nod for the merger recently. The approval from high court of Punjab and Haryana is still pending.

Both Sun Pharma and Ranbaxy will also have to meet the pre-conditions required as per the order of the Competition Commission of India and the US FTC. CCI has asked Sun and Ranbaxy to divest seven drug assets in India which is underway, company CFO Uday Baldota told Business Standard recently. US FTC had asked Ranbaxy to divest one drug asset from US market and sell that to Gujarat based Torrent Pharma.

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