Sun Pharma: Sun Pharma’s shining bright at home & overseas


ET Intelligence Group: Sun Pharma posted a strong performance in the December quarter, with India’s largest drug-maker logging its highest ever quarterly sales.

Revenue and net profit each climbed 11% even as profitability dipped marginally. Overall growth was driven by strong performance in the domestic market as well as the speciality portfolio in the US. The Sun Pharma stock closed nearly a per cent higher after the earnings.

The home-market leader, Sun posted a 15% rise in revenue from the domestic market – driven by non-Covid medication in chronic and semi-chronic therapies. The business continues to grow faster than the aggregate home market, with the company increasing its share locally to 8.6% of the total.

Revenues of Sun’s global speciality business for the first nine months have already crossed previous full-year sales. Its US business performance, too, was driven by speciality businesses. The US generics base business is facing price erosion that Sun managed to offset through new launches and better supply chain management.

Input cost inflation and gradual normalisation of other expenses related to travelling and marketing expenses impacted the company’s profitability compared to the year-ago level. Raw material cost for the quarter grew 13% – higher than the growth in net sales. Sun has rationalised R&D spending for the second consecutive quarter. Nearly a fourth of this spend was toward the speciality business.

The ramp-up of Sun’s speciality business has been an important aspect of the company’s performance that investors have focused on, and the company is managing to deliver on that count. Sun Pharma’s business in India and emerging markets are ramping up well – contributing almost half of the company’s top line in the latest quarter.

Sun has managed to repay debt to the tune of around ₹1,890 crore for the nine months ended December 2021. The company is likely to have marginal new capex across its businesses in the near term. Investors can look forward to a ramp-up across segments with its stock reflecting the progress. Resolution of compliance issues at the Halol plant can be a positive for the company’s US generics business.



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