Sun Pharma Q4 net declines 14% to Rs 1,223 cr, warns of fall in FY18 sales

Increased competition, pricing pressure, regulatory challenges continue to impact sales in US

Sun Pharmaceutical Industries has guided for a possible single-digit decline in sales, owing to regulatory challenges. This comes after it posted a 14 per cent decline in consolidated net profit for the Q4FY17.

 
Net profit for the quarter dropped to Rs 1,223 crore, against Rs 1,416 crore in the year-ago period. Total revenue, including other income, fell 6.3 per cent to Rs 7361 crore on a year-on-year (y-o-y) basis. Increased competition, pricing pressure and regulatory challenges continue to impact sales in the US market. Sales from this market declined 34 per cent on a y-o-y basis. Sun Pharma’s subsidiary, Taro, also reported a weak result and its sales were 26 per cent lower.
 
Sun Pharma’s Managing Director Dilip Shanghvi said FY18 would be a challenging year for the company and it may see a single-digit decline in revenue over FY17.
 
The company’s key Halol plant continues to be under the US Food and Drugs Administration’s (USFDA’s) scanner. “The remediation steps at Halol are ongoing and we are sharing periodic updates with the FDA,” Shanghvi said. A re inspection of the facility may be carried out this quarter.
 
“Our Q4 performance reflects the impact of the challenging generic pricing environment in the US. Despite this we continue to invest our strong cash flows in enhancing our specialty pipeline.” he  said.
 
He said the company had achieved two-thirds of the targetted $300-million synergies from the Ranbaxy acquisition, and the savings were being used to build a pipeline of specialty drugs.