Sun Pharma posts Rs 2,277 cr Q4 loss over settlement of pending US lawsuits

Provides for the settlement charges, says adjusted profit for Q4FY22 at Rs 1582 cr, up 18% YoY after excluding exceptional items of Rs 3,935.7 cr and one-time tax gain of Rs 76.4 cr

India’s largest drug major Sun Pharmaceutical Industries posted a net loss of Rs 2,277 crore for the fourth quarter of the financial year 2021-22 on account of settlement charges of pending litigations in the US, restructuring operations in some countries. The consolidated sales from operations came at Rs 9,386.1 crore, an 11 per cent year-on-year rise.

The company guided for high single digit to low double digit topline growth in FY23, and has said its research and development spend would be about 7-8 per cent of the sales in FY23. About 25 per cent of R&D is for specialty products.

Its specialty business has been growing in the past few quarters, and Dilip Shanghvi, MD, Sun Pharma said that the contribution of the specialty business has grown from 7 per cent in FY18 to 13 per cent in FY22. He said during FY22, the company’s specialty business has seen a 39 per cent jump in revenues to $674 million. Of this, Ilumya sales have seen an 81 per cent rise.

Shanghvi clarified that the company is working on responses to the 10 observations by the USFDA in a recent inspection of its Halol plant. He added that they would submit the responses in time.

On the whole, Sun Pharma has 93 ANDAs pending approval from USFDA from all its sites put together.

Sun Pharma said the adjusted net profit for Q4FY22 was Rs 1,582.1 crore, up 18 per cent YoY, after excluding the exceptional items of Rs 3,935.7 crore and an exceptional tax gain of Rs 76.4 crore. Sun Pharma’s EBITDA came in at Rs 2,279 crore, up by about 14.6 per cent over Q4 last year, with a resulting EBITDA margin at 24.3 percent.
 

The results were declared after market hours. The stock ended at Rs 888 apiece on BSE, down 1.75 per cent. The company declared a dividend of Rs 3 per equity share of Rs 1 face value.

India formulations sales were up 16 per cent during the quarter over the same period last year to Rs 3,095.6 crore while the US formulation sales came in at $389 million, up 5 per cent over Q4 last year. The emerging markets formulation sales at $206 million, up by 7 per cent over Q4 last year.

Together, India and the emerging markets contributed 50 per cent of Sun Pharma’s global consolidated revenues. India alone contributes about 33 per cent of consolidated revenues while the US contributes 31 per cent.

Kirti Ganorkar, CEO, India business of Sun Pharma, said Covid-19 drugs’ contribution to India sales has been coming down, and now contributes around 1 percent of sales only. “The underlying business excluding Covid-19 has grown 20 per cent. We have grown our market share to 8.86 per cent as of the fourth quarter of FY22. In terms of moving annual turnover, the market share stood at 8.34 per cent in March 2022, according to AWACS,” Ganorkar said.

For the full year, Sun Pharma posted a 15.6 per cent rise in sales from operations to Rs 38,426.4 crore, while its net profit for FY22 was Rs 3,272.7 crore, up 13 per cent. The EBITDA at Rs 10,169 crore is up about 23.6 per cent over last year, with EBITDA margin at 26.5 per cent, an expansion of 170bps YoY.

Shanghvi said FY22 was a “good year” when all the geographies recorded double-digit growth despite rising costs. “The specialty business continues to ramp-up strongly with global Ilumya sales recording 81 per cent growth to reach $315 million in FY22,” he said, adding that there were four specialty products in the pipeline that were under clinical trials.