Sun Pharma Q2FY21 results update
Last updated: 03 Nov, 2020 | 03:01 pm
Sun Pharmaceutical Industries Ltd., Indian drug manufacturer, serving primarily India and the US markets, on Tuesday declared their quarterly results.
Profit: Coming out of a ₹ 1,656 crore loss from last quarter, Sun Pharma’s net profit soared 70% year-on-year to ₹ 1,813 crore for the quarter ending September 2020 backed by improved margins, reducing costs and tax credit. EBITDA grew 22.5% to ₹ 2,193.3 crore, with margin increasing 360bps year-on-year to 25.6%.
Revenue and Costs: Consolidated revenue from operations grew 5.3% year-on-year and 13% quarter-on-quarter to ₹ 8,553 crore. The expenses declined by 3% to ₹ 2,392 crore.
Tax Credit and Forex Loss: Tax credit of ₹ 288 crore was on account of creation of deferred tax asset as attributable to restructuring of an acquired entity, aiding the overall profit. Forex loss of ₹ 116.4 crore was reported against ₹ 8.5 crore gain in the same period last year.
US Subsidiary: Taro Pharmaceutical Industries Ltd., Sun Pharma’s US subsidiary saw a decline in sales of 25.7% year-on-year. The US business adds to nearly 30% of Sun Pharma’s sales at a consolidated level.
Debt-to-equity ratio was down 0.13 from 0.18 last quarter. This ratio measures the financing used to run operations, a lower ratio and a decreasing one as in this case, shows the company has more owned capital than borrowed, and this shows about the growing strengths of the company.
Debt service coverage ratio: This ratio measures the operating profit available to the company, to service its all debt payment related obligations. The ratio was at 1.02 for quarter ending September 2020, a marginal decrease quarter-on-quarter.
Interest Service Coverage Ratio: Unlike debt service, this ratio includes only the financing costs which are supposed to be covered by companies’ EBIT (Earnings before interest and tax). The ratio increased two-fold to 40.5 from last quarter, implying solid interest repayment capability.
Capital Raising: Sun Pharma has issued ₹ 900 crore worth of unsecured commercial papers during the quarter, with ₹ 500 crore repayable in December 2020 and ₹ 400 crore repayable in Q1FY22.
Sun Pharma ended day’s trade at 485.6, up 3.45% from yesterday. Sun pharma continues to monitor the impact of Covid-19 on its business, customers, supply-chain, employees, and logistics. The rebound in profit shows Sun Pharma’s standing as a large drugmaker and recovery in sales.