Drugmaker Sun Pharmaceutical Industries said that its income from operations took a one-time impact of about ₹1,085 crore due to the change of its distribution in India.
Sun had announced in January that it would transition its domestic distribution from Aditya Medisales, a promoter-owned entity, to a wholly owned subsidiary.
The move was to quell corporate governance concerns raised by a whistle-blower and the investor community.
Sun’s sales from operations stood at ₹7,044 crores for the quarter ended March 31, a growth of 5 per cent over the same period last year.
The company’s India sales at ₹1,101 crores was down 44 per cent over the quarter last year. Sun posted a net profit of ₹636 crore for the quarter under review.
This was not comparable with Q4 of last year, due to the one-time impact resulting from the India distribution change as well as the one-time tax benefit of ₹259 crore for same quarter last year, the company said.
Sun Pharma Chairman and MD Dilip Shanghvi told analysts that there was no further update on the whistle-blower complaint that had been made to SEBI.
On recent reports of price-collusion litigation in the US, where seven Indian companies and Sun’s Taro had been named, Shanghvi said that the suit is without merit and Taro will continue to defend its position.
Annual performance
A filing by the company to the BSE also noted the change in designation of Sudhir Valia, who stepped down from the position of full-time director of the company to non-executive director from May 29, 2019.
Valia is Shanghvi’s brother-in-law, and some of his transactions had also become a point of concern for investors and market-watchers and had been raised by the whistle-blower.
In a statement on annual numbers, Shanghvi said: “In spite of the one-time impact for India business, our full year sales have grown by double digits. We continue to focus on executing our global specialty strategy. Ilumya is expected to gradually gain traction in US in FY20 while the Cequa launch is expected in the coming months. At the same time, we are strengthening our core operations, optimising the cost structure and enhancing our overall efficiencies.”
Sun’s annual sales for the year ended March 31, 2019 stood at at ₹28,686 crore, a growth of 10 per cent over last year.
Its net profit stood at ₹2,665 crore for the period under review.
The US finished-dosage sales clocked $1,526 million, up by 12 per cent over last year.