Sun Pharma's third quarter results got a big boost from its subsidiary Taro Pharmaceuticals' strong quarterly show. The company reported a consolidated revenue of Rs 2,145 crore, a growth of 37 per cent year-on-year. Its operating margins, at 45 per cent, too got a leg-up from Taro (50.3 per cent operating margin during the quarter). Sun's operating margin was at 28 per cent in the year-ago quarter.

These, in addition to an increase in interest income drove profits up by about 91 per cent to Rs 668 crore. Profit growth, however, would have been higher but for MTM (marked-to-market) losses on its hedges.

Taro tan over Sun

Sun Pharma's current growth rates may not be sustainable in the coming quarters as it was driven largely by Taro's financials. In the Dec-2011 quarter, Taro posted a revenue growth of 44.3 per cent to $148.1 million, helped by price increases on select products in the US market, even as volumes remained flat. Its profits rose by almost four times to $62.4 million. Overall, Sun's US business (sale of finished dosage products) grew by about 47 per cent to $208 million in the third quarter (47 per cent of total sales).

With Taro's management indicating that such high growth rates cannot be matched in the coming quarters, Sun's growth trajectory too may moderate . But to adjust for the better-than-expected growth, Sun Pharma has slightly upped its sales guidance for FY12 from the earlier 28-30 per cent to 32-34 per cent.

During the quarter, Sun Pharma filed one ANDA (abbreviated new drug application), taking its cumulative filings to 389. Besides, three ANDAs were approved during the quarter, bringing total ANDA approvals for the company to 241.

Domestic formulation grew by 17 per cent to Rs 696 crore (32 per cent of total sales). This is excluding third party manufacturing business which has been discontinued. It launched six new products during the quarter. The Sitagliptin+Metformin combination has also been launched under Sun-MSD JV and has about 10 per cent market share. The dry powder inhaler in-licensed from SPARC has also shown reasonable traction, the management said.

Sun Pharma holds a 4.5 per cent market share in the Rs 60,000-crore pharma market, according to latest AIOCD report.


(This article was published on February 14, 2012)
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