Ranbaxy portfolio makes up for 37% of Sun's India sales

Ranbaxy contributes a little lower than Rs 3k cr to the India sales of the merged entity

Close to two years after Dilip Shanghvi-led Sun Pharmaceutical completed the acquisition of Ranbaxy, indications are that the Ranbaxy portfolio’s contribution has grown from 32 per cent to 37 per cent of the combined India sales. In the overall domestic sales tally, Sun Pharma’s share has dropped from 68 per cent to 63 per cent since March 2015.    

Currently, Ranbaxy contributes a little lower than Rs 3,000 crore to the India sales of the merged entity. Of the combined domestic sales of over Rs 8,000 crore, Sun Pharma’s contribution is estimated at more than Rs 5,000 crore. 

While Ranbaxy attributes for around 37 per cent, Sun makes up for as much as 63 per cent of the total India sales. At the time of completing the acquisition in March 2015, Sun Pharma’s contribution was Rs 4,500 crore (68 per cent) while Ranbaxy’s was estimated at Rs 2,200 crore (32 per cent), out of the combined India sales of Rs 6,700 crore at that point.       

Sources said that while a large part of the integration process has been completed, it may take another 18 months for the benefits of the merger to show, it is learnt. Sun Pharma announced the deal in 2014 to buy Ranbaxy from Japanese pharma major Daiichi Sankyo for around Rs 22,000 crore; the transaction was completed in 2015.       

India business makes up for 25 per cent of the total sales of Sun Pharma along with Ranbaxy. It is the top player in India, with a market share of 9 per cent. The US remains the largest market for Sun at 50 per cent of its total sales revenue.  

The company does not share segregated sales figures of Sun and Ranbaxy. 

According to the latest records submitted to the stock exchange by Sun Pharmaceuticals, 21 step-down subsidiaries and five direct subsidiaries survive of Ranbaxy. Each one has the erstwhile Ranbaxy name on paper. 

At the time of formalising the merger, the total number of manufacturing plants of the two entities was 45. Around 19 were those of Ranbaxy. While a couple of factories from both sides have been shut down, some have been added too, thereby keeping the number almost constant, a source said. Having come under the scanner of the US FDA, four factories of Ranbaxy do not supply to the American market for several years now.    

As far as the product line inherited, none retains the Ranbaxy branding. One of Ranbaxy’s famous products pain-killer Volini was earlier marketed as “Ranbaxy Volini”, but it’s now being marketed as “Volini”.

Acquiring Ranbaxy Laboratories, Sun Pharmaceutical entered the Over the Counter or OTC space with brands like Volini, Revital H etc.  An official in the know of the numbers told Business Standard that the growth in the OTC business has been 17 per cent after Sun Pharmaceuticals acquired Ranbaxy.

The company also re-launched Suncros as an over-the-counter product, a product that was launched by Ranbaxy in 2005. Suncros was initially a prescription medicine.

In response to Business Standard’s query on specific products Volini and Revital H, Sun Pharmaceuticals said, “both brands are seeing healthy growth and continue to be market leaders in their respective categories”.

A comparison of employee numbers as given in Sun Pharma annual reports showed that a quarter of its workforce was reduced in the financial year 2015-16. However, the company has not confirmed any significant reduction in employee numbers. Currently, around 10,000 employees work in the India offices of the company, and it is learnt that it has no major hiring plans as of now.