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Sun Pharma’s Q2 profit rises by 90%

Sun Pharma’s Q2 profit rises by 90%

MADRID: Healthcare major Sun Pharmaceutical Industries   ‘ consolidated profit shot up 90.2 percent year-on-year to Rs 2,471 crore in the quarter ended September 2016, driven by operating income and lower finance cost.

Revenue during the quarter grew by 20.2 percent to Rs 8,265.1 crore compared with Rs 6,873.3 crore in same quarter last fiscal and revenue excluding other operating income rose by 13.2 percent to Rs 7,764 crore. Numbers were aided by other operating income that stood at Rs 501 crore in Q2FY17 (against Rs 15.13 crore in Q2FY16). It included USD 45 million of milestone payment from Almirall SA (Spain) as part of the licensing agreement for the development and commercialisation of Tildrakizumab for psoriasis in Europe.

“The synergies from the Ranbaxy acquisition are gaining momentum and we are on track to achieve the targeted benefits. These synergies will continue to help in funding our emerging specialty businesses,” Dilip Shanghvi, Managing Director said. The company also announced the detailed results for Tildrakizumab phase-3 trials which validate the potential of this product for psoriasis treatment. Topline without milestone payment was in line with expectations while bottomline was far ahead of estimates.

Profit was estimated at Rs 1,685 crore on revenue of Rs 7,772.8 crore for the quarter, according to average of estimates of analysts polled by CNBC-TV18. EBITDA (earnings before interest, tax, depreciation and amortisation) shot up 69.1 percent year-on-year to Rs 3,167.7 crore and margin expanded sharply by 1110 basis points to 38.3 percent in Q2, which were far ahead of estimates of Rs 2,487 crore and 32 percent, respectively. EBITDA excluding milestone payment increased 43.5 percent to Rs 2,667 crore and margin grew by 730 basis points to 34.3 percent in Q2.

Finance cost during the quarter dropped 66 percent year-on-year to Rs 53.7 crore while tax expenses jumped 50 percent to Rs 441.6 crore. Research and development expenses as a percentage of revenue remained stable at 7.3 percent (Rs 570 crore against Rs 498 crore) on yearly basis. Revenue from US formulations, which accounted for 48 percent of total income, increased 9 percent YoY to USD 555 million, including sales of Gleevec generic till July 2016 while India business grew by 11 percent YoY to Rs 2,009 crore in the quarter ended September 2016.

Emerging markets sales during the quarter climbed 22 percent YoY to USD 170 million and the Rest of World business grew by 3 percent to USD 79 million. Active pharmaceutical ingredients business showed a 17 percent growth at Rs 367 crore for the quarter.