Sun Pharma tops market forecasts as Q2 profit rises 13%

Sun Pharmaceutical Industries Ltd reported an increase of almost 13% in its consolidated net profit for the second quarter, as costs rose at a slower pace than sales and tax expenses fell.

India’s biggest drugmaker said consolidated net profit for the July-September period grew to Rs Rs 2,047 crore from Rs 1,813 crore in the same quarter last year. However, profit was up 29% compared with the adjusted earnings of the second quarter last year. Sequentially, profit jumped by a fourth from Rs 1,444 crore in April-June.

Consolidated revenue for the second quarter climbed 12.5% to at Rs 9,626 crore from Rs 8,553 crore in the July-September 2020 quarter. However, revenue slipped sequentially from Rs 9,719 crore in the first quarter of the current financial year.

Sun Pharma managed to keep costs under control with total expenses rising 9.7% from a year earlier to Rs 7,562 crore in the second quarter. Its tax expenses fell to Rs 198 crore from 257 crore a year earlier.

Both revenue and profit came ahead of estimates by most brokerage houses. For instance, Motilal Oswal had expected consolidated revenue at Rs 9,270 crore and a profit after tax of Rs 1,780 crore. Edelweiss had projected revenue at Rs 9,480 crore and net profit at Rs 1,623 crore.

Similarly, BOB Capital Markets had expected revenue of Rs 9,426 crore and a profit of Rs 1,658 crore.

Sun Pharma Q2: Other highlights

1) Standalone profit jumped to Rs 809 crore from Rs 223.7 crore during the second quarter last year.

2) On a sequential basis, the bottom line looked even better as it had recorded a loss of Rs 138.28 crore in Q1.

3) Standalone revenue rose to Rs 4,143.5 crore from Rs 3,531 crore a year earlier and Rs 3,665 crore in Q1.

4) Consolidated India sales at Rs 3,187.8 crore, up 26% over same quarter last year.

5) US finished dosage sales at $361 million, growth of 8% over Q2 last year.

6) Emerging markets sales grow 16% to $243 million; Rest of World sales rise 5% to $188 million.

7) Consolidated EBITDA at Rs 2,560.8 crore, up 21% over Q2 last year, with EBITDA margin of 26.8%.

Sun Pharma management commentary

Dilip Shanghvi, Managing Director of Sun Pharma, said the company sustained the positive momentum in the second quarter with a top-line growth of 13%, driven by a broad-based growth across multiple geographies.

“Our global specialty business has grown by 43% over Q2 last year. Ilumya has grown both YoY and sequentially,” he said, referring to the treatment of plaque psoriasis in adult patients.

Shanghvi also said that Sun Pharma’s India business continues to do well with a growth of 26% YoY. “We remain steadfast in our focus on growing our overall business and simultaneously strengthening our global specialty portfolio. The recent launch of Winlevi in US and Ilumya in Canada is a step forward in this direction,” he said.