US drags down Sun Pharma's overall Q3FY18 earnings; consolidated PAT declines 75% yoy

Pharma-giant Sun Pharma posted a weak financial performance for the third quarter ended December 2017 (Q3FY18), with both consolidated top-line and bottom-line seeing decline. 

The company posted consolidated profit after tax (PAT) of Rs 365.39 crore - declining by 75.17% compared to Rs 1,471.82 crore in the corresponding period of the previous year. 

Q3FY18 PAT also tumbled by 59.94% from Rs 912.12 crore in the preceding quarter. 

EBITDA (operating profit) of Sun Pharma came in at Rs 1,398 crore, while the margins stood at 21.2% during the period. 

Consolidated revenue came in at Rs 6,598.21 crore this quarter, which decreased by 14.12% from Rs 7,683.24 crore a year ago same period, but was mostly muted as against revenue of Rs 6,590.06 crore in Q2FY18. 

Dilip Shanghvi, Managing Director of the company, said, “Our Q3 performance reflects a gradual improvement in profitability over the first half of this year, despite a challenging US generic pricing environment."

"During the quarter, we took another step forward in enhancing our specialty business by reporting acceptance of NDA filing for OTX-101 by the US FDA," Shanghvi added.

Decline in revenue was primarily driven by the US business. All other businesses have grown for the quarter.

Here are the key highlights of Sun Pharma's Q3FY18 financial performance.

• India sales at Rs 2,085 crores, growth of 6% over Q3 last year
• US finished dosage sales at US$ 328 million down by 35% over Q3 last year. The reduction is partly driven by the YoY decline in sales of generic Imatinib and Olmesartan authorized generics
• Emerging Markets sales at US$ 189 million up by 10% over Q3 last year
• Rest of World sales at US$ 120 million, growth of 6% over Q3 last year
• R&D investments at Rs 473 crores (7.2% of sales) compared to Rs 613 crores (8% of sales) for Q3FY17

For nine months’ period of FY18, the company's revenue amounts to Rs 19,355 crores, witnessing  de-growth of 17% over same period last year. While PAT came in at Rs 853 crore down by 84.14% compared to corresponding period of the last fiscal. 

Sun Pharma mentioned that 9MFY18 PAT was adversely impacted by a one-time deferred tax adjustment of Rs 513 crores related to changes in the US tax rates and settlements with certain plaintiffs related to the Modafinil antitrust litigation in the US, with the settlement amounting to Rs. 951 crores reported in Q1FY18. 

It highlighted, excluding both these one-time impact, the adjusted net profit for 9m FY18 was at Rs 2,316 crores.

Share price of Sun Pharma finished at Rs 574.45 per piece on the BSE, down by Rs 14.90 or 2.53%.