Sun Pharma’s 64 per cent revenue growth in the June quarter was largely driven by strong performance in the US (148 per cent) and the other emerging markets (45 per cent).

Supplies of anti-cancer drug Lipodox to the US market on the back of supply shortage and temporary export permission by the US drug regulator, continued to benefit Sun’s revenues and margins.

Taro’s impressive 30 per cent revenue and 73 per cent profit jump, on the back of a low base and good pricing environment boosted Sun’s consolidated performance.

As a result, the company’s operating margins vaulted to 46.3 per cent, a stellar 12.8 percentage point increase over the same period last year.

While Lipodox may continue to benefit Sun over the next two quarters, Taro’s management is cautious about the sustainability of its growth pace and margins.

Growth in the other emerging markets also gained traction in the quarter, registering 45 per cent growth over the same period last year. Sun’s revenues in the domestic market declined eight per cent due to one-off sale to the tune of Rs 180 crore in the March quarter, adjusting which the growth was 20 per cent. With nine product launches in India in the last quarter, growth momentum in the domestic market is expected to continue in the forthcoming quarters too.

Beginning June quarter, the company has decided to adjust the marked-to-market loss/gain on inventories on account of forex fluctuations against the forex fluctuation reserve in the balance-sheet.

Gain of Rs 75-crore realised in the June quarter has been accounted in the balance- sheet, as a result of which the profits are lower to that extent.

(This article was published on August 11, 2012)
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