Last updated: 28 May, 2021 | 03:10 am
Earnings below estimates: Sun Pharma has reported a net profit of ₹894.15 crore in Jan-Mar 21, down 52% on-year. Analysts had estimated a profit of about ₹1,375 crore. The numbers were impacted due to losses reported by the company’s US arm.Further, the company has taken an exceptional hit relating to provisions amounting to Rs 672.8 crore.
Revenue misses: Revenue declined 4% on-year to Rs 8,523 crore, against the analysts’ forecast of Rs 88,716 crore.The revenue was impacted on the back of low growth in the US, because of the non-recurring medicine sales a year ago and the seasonality effect in the quarter. Sale of branded formulations in India for Q4FY21 were at Rs. 2,670 crores, up by 13% on-year, accounting for 31% of total sales. Sun Pharma remains the market leader in India with a market share of 8.2%. Sales in the US (including Taro) were US$ 370 million, down 9% over Q4 last year, accounting for about 32% of total consolidated sales.
US subsidiary Taro underperforms: Sun Pharma’s U.S. subsidiary Taro’s sales declined 15% on-year to $148 million. Taro’s reported net loss for Q4FY21 was US$ 29.8 million, dragging down the overall consolidated net profit of the company during the period.
Interim dividend: Sun Pharma has announced a dividend of Rs 2 per share for FY21.
Sun Pharma has reported a disappointing set of numbers for Q4FY21, dragged by poor show in its US business. The India business continues to outperform. The bottomline was impacted by provisions worth Rs 672 crore.Going forward, the company is set to get its performance back on track as it has been gradually resolving its pending legal settlements and corporate governance concerns. The management has also alluded to considering biosimilars as a serious opportunity over the next 4-5 years. Pharma stocks can continue to be good defensive bets in these turbulent times.