Sun Pharma Q2 net profit dips 46% to Rs 1,107 crore

New Delhi: Drug major Sun Pharma on Saturday reported a 46.02 percent dip in its consolidated net profit to Rs 1,106.66 crore for the quarter ended September 30, 2015 due to lower sales growth, volatile currency movements and supply constraints.

The company had posted a net profit of Rs 2,050.22 crore for the corresponding period of the previous fiscal, Sun Pharmaceutical Industries said in a statement.

Consolidated net sales of the company declined to Rs 6,803.31 crore for the quarter under consideration as against Rs 7,979.31 crore for the same period a year ago.

Commenting on the results, Sun Pharma Managing Director Dilip Shanghvi said: "Our performance for the quarter and first half FY16 has been impacted by lower sales growth, volatile currency movements and supply constraints."

Nonetheless, "we continue to invest significantly in enhancing our specialty and complex generics pipeline. Integration of Ranbaxy is progressing well and while some of the costs have been incurred, the benefits will be visible going forward. We also continue to evaluate opportunities to expand our global foot print," he added.

The company's sales of branded formulations in India for the second quarter stood at Rs 1,819 crore, up 1 percent from the corresponding quarter last year and accounted for 26 percent of the total sales, Sun Pharma said.

In the US, sales stood at USD 510 million for the quarter, down by 28 percent, as against the same period of last year. The US sales accounted for 48 percent of total revenues of the drug firm.

Sales in the US during the quarter were impacted primarily due to competitive pressure on some products and temporary supply constraints arising from remediation efforts at the Halol facility, Sun Pharma said.

In the emerging markets, the company's sales stood at USD 140 million for the second quarter, down by 16 percent from the corresponding quarter last year.

"The decline is the result of volatile currency movements in certain emerging markets and a strategic decision of not participating in low margin businesses," it added.

Formulation sales in Rest of World (ROW) markets excluding US and emerging markets, stood at USD 76 million in the period under review, down 30 percent from the corresponding quarter last year.

The company said it increased the active pharmaceutical ingredient (API) supply for captive consumption significantly for key products.

The company has approved abbreviated new drug applications (ANDAs) for 445 products in the US, while filings for 154 products await US FDA approval. During the second quarter the company received four product approvals.