Sun Pharma Q4 profit falls by half to Rs 636 crore due to change in distribution strategy

Sun Pharma said the net profit for the fourth quarter of FY2018-19 is not comparable with the year-ago period due to the one-time impact of distribution change for India business in the fourth quarter of 2018-19 as well as the one-time tax benefit of Rs 259 crore for the same quarter during the last year.

New Delhi: Drug major Sun Pharmaceutical Industries Tuesday reported a consolidated net profit of Rs 635.88 crore for the fourth quarter ended on March 31, 2019.

The company had posted a net profit of Rs 1,342.50 crore for the corresponding period of the previous fiscal, Sun Pharmaceutical Industries said in a filing to BSE.

The company said the net profit for the fourth quarter of FY2018-19 is not comparable with the year-ago period due to the one-time impact of distribution change for India business in the fourth quarter of 2018-19 as well as the one-time tax benefit of Rs 259 crore for the same quarter during the last year.

Earlier in April this year, Sun Pharma had said that the transition of distribution related to India domestic formulations business from Aditya Medisales to company's arm Sun Pharma Distributors will impact the financial results for the period ended March 31, 2019.

Consolidated revenue from operations of the company stood at Rs 7,044.26 crore for the quarter under consideration. It was Rs 6,711.01 crore for the same period a year ago.

"Sales for the quarter include a one-time impact of approximately Rs 1,085 crore related to the change in distribution for India business," Sun Pharma said.

Sale of branded formulations in India for the last quarter of 2018-19 was Rs 1,101 crore, down by 44 per cent, the company said.

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However, sales in the US were $443 million (around Rs 3,082 crore) for the quarter, a growth of 20 per cent over the same period last year and accounted for 44 per cent of total sales, it added.

For the fiscal year ended March this year, the net profit of the company stood at Rs 2,665.42 crore. It was Rs 2,095.70 crore for the previous fiscal year.

Consolidated revenue from operations of the company stood at Rs 28,686.28 crore for the fiscal year ended March 2019. It was Rs 26,065.94 crore for the year-ago fiscal year.

Commenting on the results, Sun Pharma Managing Director Dilip Shanghvi said, "In spite of the one-time impact for India business, our full-year sales have grown by double digits." The company continues to focus on executing its global speciality strategy. Ilumya is expected to gradually gain traction in the US in FY2019-20 while Cequa launch is expected in the coming months, he added.

"At the same time, we are strengthening our core operations, optimising the cost structure and enhancing our overall efficiencies," Shanghvi said.

For 2019-20 fiscal, the company has earmarked a capital expenditure of USD 200 million (Rs 1,391 crore), Shanghvi said during an earnings call.

Sun Pharma said its board has recommended payment of a dividend of Rs 2.75 per equity share of Re 1 each for the year ended March 31, 2019.