NEW DELHI : India’s largest drug-maker Sun Pharmaceutical Industries Ltd departed from its usual practice of providing a sales guidance for 2020-21, saying that it expects near-term uncertainty due to the covid-19 pandemic.
“As for the guidance, I wish we could give you a guidance. However, given the uncertainties in near term we are breaking from our normal practice of giving a guidance. We will revisit this stance in the next quarter," Sun Pharma managing director Dilip Shanghvi said in an investor conference call.
Last year, the company had given a guidance of consolidated sales growth being in the low to mid-teens. Eventually the drug-maker’s sales were up 13% for 2019-20.
The lack of guidance for the current financial year came even as the company posted a 14% growth in revenue to ₹8,185 crore in January-March on account of strong sales in the India market.
However, the Mumbai-based pharmaceutical company said that with the covid-19 lockdown being primarily in the April-June quarter so far, there is considerable uncertainty in the coming year.
“We estimate some softening of sales in the near term due to the lockdown and some stockpiling by customers. It is difficult to quantify the impact at this point of time," Shanghvi said.
The covid-19 lockdown in India, which started in the last week of March, is currently in its fourth phase that ends on 31 May.
The company’s head of India business, Kirti Ganorkar, said that April-June quarter is likely to be challenging especially as April saw substantially lower prescriptions due to the stringent lockdown and lack of clinic visits and elective surgeries. He expects sales to recover in June after seeing some positive change in May.
India’s largest drug-maker, just like its peers, has seen a disruption in its operations since the nationwide lockdown to curb the spread of covid-19 started in March, while globally too, the pandemic has caused significant disruption.
The company’s US sales declined 15% year-on-year to $375 million, but this was primarily due to a one-time benefit it received in the corresponding period last year.
Sun Pharma posted a 37% decline year-on-year in its consolidated net profit in January-March to ₹400 crore as the company was hit by a one-time expense of ₹260 crore over settlement of some litigations.
The company had to make a settlement of 104 crores related to taxes in India, while it also had to make a provision of ₹156 crores for settlement with US-based Dusa Pharmaceuticals, as per the notes to the Sun Pharma’s regulatory filing on Wednesday.
Shanghvi, also the promoter of Sun Pharma, said that the disruption caused by the pandemic will considerably change the way business is conducted.
“While we continue to focus on controlling costs, improving productivity and improving efficiencies in all our businesses, covid-19 pandemic is likely to change the way business will be conducted in future at least for a short time...," Shanghvi said.
The company has already started pitching its products to doctors through virtual conferences instead of physical meetings, and the company itself is taking measures like work from home to keep its employees safe.
Shanghvi said that the company’s clinical trial for additional indications of anti-psoriasis Ilumya have been disrupted on account of the pandemic as doctors aren’t focussing on non-covid clinical trials right now.
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