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Sun Pharma expects normalisation of India business in Financial year-2019


Sun Pharma expects normalisation of India business in Financial year-2019

Shanghvi said the short-term outlook for the US generics market continues to be challenging given the pricing pressures. 

NEW DELHI: Sun Pharma expects its India business to stabilise in the current fiscal leading to “reasonable volume growth” after witnessing disruptions in 2017-18 due to GST implementation, a top company official said. In a message to shareholders in the company’s Annual Report for 2017-18, Sun Pharma managing director Dilip Shanghvi, however, said the government’s enforced price cuts and policy changes are potential risk factors for the business.

“We expect normalisation of the India business in the 2018-19 post the disruption in 2017-18 due to GST implementation. Favourable demographics will ensure reasonable volume growth in India,” Shanghvi said.

However, government-mandated price reductions/policy changes continue to be potential risks for this business, he added.

The company’s India business revenues stood at Rs 8,029 crore in 2017-18, a growth of 4 per cent over 2016-17.

Shanghvi said the short-term outlook for the US generics market continues to be challenging given the pricing pressures.

“We are also expecting reasonable growth in our emerging markets business, however, as always, currency fluctuations continue to be a risk,” he added.

However, government-mandated price reductions/policy changes continue to be potential risks for this business, he added.

The company’s India business revenues stood at Rs 8,029 crore in 2017-18, a growth of 4 per cent over 2016-17.

Shanghvi said the short-term outlook for the US generics market continues to be challenging given the pricing pressures.

“We are also expecting reasonable growth in our emerging markets business, however, as always, currency fluctuations continue to be a risk,” he added.

Elaborating further, he said the company is in the process of gradually ramping up its global speciality business.

“We plan to increase its contribution to our consolidated revenues in the long term. This will entail significant front-ended investments, with commensurate revenue streams accruing only over a period of time,” Shanghvi said.

Some of the company’s speciality products are likely to be commercialised in the US in 2018-19 and hence it expects to incur significant pre-launch and branding costs along with increasing sales force costs, he added.

“Given these factors, we expect a low double-digit topline growth in our consolidated revenues for 2018-19 over 2017-18,” Shanghvi said.

The Mumbai-based drug firm posted consolidated revenues of Rs 26,489.46 crore for 2017-18.

Shanghvi said the company’s consolidated R&D investments for 2018-19 will be about 8-9 per cent of its revenues.



Source: PTI
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