Mumbai: India’s largest drug maker Sun Pharmaceutical Industries Ltd reported a 13.6% year-on-year drop in its consolidated net profit to Rs1,223.71 crore in the quarter ended March, missing analysts’ estimates, because of lower sales in the US, its biggest market.
Net sales fell 8% to Rs6,825.16 crore during the quarter from Rs7,415.98 crore in the corresponding period a year ago.
According to a Bloomberg poll of 24 brokerages, the company had been expected to post a net profit of Rs1,506.30 crore on net sales of Rs7,800.50 crore.
Sales in the US were $381 million in the March quarter, down 34% from a high base last year, when Sun Pharma had reaped gains from the launch of a generic version of the cancer drug Gleevec on six months’ marketing exclusivity.
The drug maker said it could see sales decline in the current financial year as well because of pricing pressure and the slow pace of new product approvals in the US.
“US generic industry is facing rapidly changing market dynamics. Increased competitive intensity and customer consolidation is leading to pressure on pricing," managing director Dilip Shanghvi said in a post-earnings conference call with analysts.
The company’s guidance for a decline in revenue was a surprise, said one analyst.
“This will impact our future earnings estimates for Sun Pharma. I think this year will be a year of pain as US business may see a decline amid pricing pressure and no major product approvals. Also, growth in India would be in single digit," said Surya Patra, analyst at PhillipCapital India.
Sun Pharma filed 14 abbreviated new drug applications with the US Food and Drug Administration in the March quarter.
India sales were up 10% at Rs1,916 crore, while sales in emerging markets rose 46% to $181 million. Sales in the rest of the world markets grew 38% to $109 million.
Sun Pharma subsidiary Taro Pharmaceutical Industries Ltd reported a disappointing set of numbers earlier this week due to pricing pressure in the US market.