Sun Pharma expects double digit sales growth in FY19

Sun Pharmaceutical Industries has posted for low double-digit sales growth in FY 19 after a Q4 result which saw seven per cent rise in consolidated net profit.

India's largest drugmaker reported a net profit of Rs 13.08 billion as against Rs 12.23 billion in the same quarter last year aided by one-time tax gain of Rs 2.59 billion. Revenue from operations declined two per cent to Rs 67.11 billion on account of continued pressure in the US market.

However, the decline in sales in the fourth quarter was much lower compared to first nine months of the fiscal. This is also because of the lower base from fourth quarter FY 17 when the sales in US was impacted by price erosion and consolidation of the distribution channel.

The company expects revenue growth on the back of three speciality drug launches in US and growth across markets. In a post result conference call Sun Pharma managing director Dilip Shanghvi said the company will spend 8-9 per cent of its revenue on R&D for speciality products and rationalise its generic drugs portfolio. The company announced lower dividend (Rs 2  per share for FY 18  compared to Rs 3.5 per share last year) in view of its R&D  investments.

Shanghvi said while the resolution of quality issues at Halol plant was taking longer than expectation the company had cleared US Food and Drug Administration audits at 18 sites last year with zero or limited observations. 

“Our Q4 performance is in-line with our guidance. Over the last four quarters, we have been able to record a gradual improvement in performance despite a challenging US generic pricing environment,” Shanghvi said in a statement.

He added that that the company was likely to launch three speciality products in the US marking an important milestone in its drug development programme. This includes – psoriasis drug (Ilumya), eye drops  (OTX-101) and anti cancer drug Yonsa and this will entail upfront investments.