Sun Pharma Q4 net more than doubles to Rs 894 cr on better operational show

Low base supported overall performance; consolidated sales from operations came in at Rs 8,431 crore, up 4.4% YoY

Sun Pharmaceuticals posted a 124 per cent year-on-year (YoY) rise in net profit in the fourth quarter of financial year 2020-21 at Rs 894 crore. This is mainly on operational efficiencies and a low base in the corresponding quarter last year.
 
The company said it is evaluating developing a new pipeline of biosimilars as its R&D focus. It has also requested for an inspection of the Halol site in Gujarat. When compared to Rs 636 crore net profit in Q4 of FY19, the rise is around 40 per cent. The year 2019-20 was partially hit by the Covid-19 pandemic, thanks to a national lockdown beginning March. This impacted sales.

 
Sun Pharma’s consolidated sales from operations came in at Rs 8,431 crore, up 4.4 per cent YoY, and when compared to Q4 of FY19, it is up 19 per cent.
 

Sales, however, was down 4 per cent sequentially. The company said that Q4 of FY20 sales had an exceptional item (one-time business in the US) and thus the numbers were not strictly comparable.
 
Sun Pharma recorded an earnings before interest, taxes, depreciation, and amortisation (Ebitda) of Rs 1,956.8 crore, up 56 per cent over Q4 last year with a resulting Ebitda margin of 23.2 per cent. The company said that higher operational efficiencies have helped the margins. Brokerages had estimated over 100 per cent rise in profits during the quarter backed by healthy operating performance and a low base in the same quarter last year.

 
Kotak Institutional Secu­rities had expected a 141 per cent rise in profit and a 41 per cent in Ebitda on a YoY basis.
 
Dilip Shanghvi, managing director of the company, said, “FY21 was a year marked by a highly-volatile business environment due to the global Covid-19 pandemic and lockdowns in various countries. Despite these challenges, I am happy to see that we have been able to maintain business continuity and record positive overall growth. While our India business continues to outperform the average industry gro­wth, our global specialty sales continued to show an improving trend. Global Ilumya sales for the year have grown 51 per cent to $143 million.”

 
He added that sales in the second half of the year were better than the first half, that is, almost 8 per cent more. The second half witnessed gradual recovery in business owing to lifting of lockdowns.
 
Shanghvi added the company has requested for an insp­ection of the Halol site. “If that goes through well, and we get new product approvals in the US, then it can add to our US business,” he added.
 
India sales posted stronger growth than the US market — up 13 per cent YoY during the quarter. US finished dosage sal­es, in turn, posted a 1.3 per cent decline YoY to $370 million. Emerging market sales were up 2.8 per cent to $192 million.