Sun shines bright on Sun Pharma: Q3 beats street estimates

World’s fifth largest and India’s largest specialty generic pharmaceutical company Sun Pharmaceuticals announced its Q3FY16 results on Friday. The results were better than what the street was anticipating. Sequentially profit rose by 28 per cent.

Consolidated revenues from operations stand at Rs 7082.1 crore as against Rs 6837.6 crore, a growth of 3.58 per cent sequentially. Strong sales growth was primarily aided by the company’s Indian operation as it registered strong growth in the quarter gone by.

Operationally too company was able to optimize on EBITDA as it grew by 12.17 per cent Q-O-Q (quarter on quarter) to Rs 2169 crore as compared to Rs 1933.7 crore. Company was efficient as expenses were on a lower side. Purchase of traded goods as a percentage of total sales revenue declined by 1053 basis points to 4.08 per cent. Integration efforts with Ranbaxy are certainly helping Sun in cutting down on costs. Employee expenses also declined Q-O-Q. Margins for the quarter in review expanded by 235 basis points to 30.63 per cent as against 28.28 per cent.

Profits for Q3 stand at Rs 1416.6 crore as against Rs 1106.7 crore attained in the last quarter of the same fiscal FY16, representing a growth of 28.01 per cent. Other income for the quarter also increased in Q3, however interest expense was recorded at a lower level.

R&D investments are at Rs 582 crores, i.e. 8.3 per cent of net sales compared to 7.5 per cent of net sales for Q3 last year. This increased R&D expenditure includes significant investments on account of funding the clinical development of Tildrakizumab, the IL-23 monoclonal anti-body licensed from MSD (US).

For the third quarter, 5 ANDAs (Abbreviated New Drug Applications) were filed and 1 approval was received. Company also awaits US FDA approval in total for 156 products including 10 tentative approvals.

Sun Pharma’s results are not comparable on a Y-O-Y basis due to amalgamation with Ranbaxy with effect from FY16.

Sun Pharma’s US finished dosage, sales stand at USD 486 million for the quarter, a reduction of 11 per cent over same period last year and accounted for 45 per cent of total sales. Emerging markets sales stand at USD 151 million. Sale of branded formulations in India for Q3FY16 stands at Rs 1890 crores, up 8 per cent from the corresponding quarter last year and accounts for 27 per cent of total sales. Sun Pharma was ranked No. 1 and holds approximately 8.8 per cent market share in the Rs 96,000 crores pharmaceutical market as per Dec-2015 AIOCD-AWACS report, said the press release.

According to, Dilip Shanghvi, Managing Director of the Company “Our results for Q3 indicates sequentially improving quality of business and performance. This is despite adverse currency movements and increase in R&D investments. The synergy benefits of the Ranbaxy acquisition have begun to reflect in our financials. We remain committed in allocating required resources for enhancing our specialty and complex generics pipeline.”

Reacting to the results Sun Pharma scrip closed positively for the day at Rs 842.40 up by 1.45 per cent on NSE.