Sun Pharma rallies 7% as Q1 profit beats Street estimates

The stock rallied 7% to Rs 600 on the BSE after the company reported a better-than-expected consolidated net profit at Rs 9.83 billion in June quarter.

Shares of Sun Pharmaceutical Industries have rallied 7% to Rs 600 per share on the BSE after the pharmaceutical company reported a better-than-expected consolidated net profit at Rs 9.83 billion in June quarter (Q1FY19). The company had posted a loss of Rs 4.25 billion in the same quarter year ago.

The stock is trading close to its 52-week high of Rs 609 on February 12, 2018 in intra-day trade. The trading volumes on the counter jumped nearly three-fold with a combined 13.76 million equity shares changed hands on the BSE and NSE till 02:40 pm.

The company’s total revenue from operations grew 16% at Rs 72.24 billion in Q1FY19 against Rs 62.09 billion in the corresponding quarter of previous fiscal.

Analysts on an average had expected profit of Rs 9.20 billion on revenue of Rs 70.41 billion for the quarter.

“Net profit for the same quarter last year was adversely impacted by settlement with certain plaintiffs related to the Modafinil antitrust litigation in the US, with the settlement amounting to Rs 9.51 billion. Excluding the impact of this settlement, adjusted net profit was up by 87% over Q1 last year,” Sun Pharma said in a press release.

EBITDA (earnings before interest, tax, depreciation and amortization) margin stood at 21.3% against 17.1% in year ago quarter.

Dilip Shanghvi, Managing Director of the company said, “For Q1, we have recorded good growth in all the major markets. We are gradually crossing key milestones in our specialty initiatives with the recent commercialization of Yonsa in the US and targeted launch of Ilumya and Cequa in the coming quarters.

“We are also awaiting approvals from US FDA for two specialty products, Xelpros and Elepsia, filed from Halol. With all these specialty launches lined-up, a substantial portion of our current specialty pipeline will be on market. We are creating a deep pipeline of specialty products, however, during the year these launches will result in significant upfront investments. We continue to evaluate opportunities in the specialty segment to further enhance this business,” added Dilip Shanghvi.