Sun Pharmaceutical Industries reported a 17 per cent year-on-year fall in consolidated profit before taxes (PBT) at Rs 577 crore for the March 2020 quarter. The PBT was below estimates, impacted by multiple one offs and lower other income. Consensus pre-tax profit was estimated at Rs 1,361 crore. Net profit, too, saw a 37 per cent fall to Rs 399.8 crore as compared to estimates of Rs 950 crore – Rs 1,000 crore.

There were three one-offs related to anti-trust litigation, central excise refund and a settlement reached by its US subsidiary Dusa Pharmaceuticals. The company has made a provision of Rs 124 crore to settle an anti-trust litigation for sleep disorder drug Modafinil. It has also charged Rs 104 crore to the profit and loss account for a case related central excise refund, while Rs 156 crore was has been provided for a case related to sales, marketing and promotion of two Dusa Pharma products - Levulan and Blu-u - for skin conditions. The company has reported about Rs 260.64 crore under exceptional items and the rest in other expenses. Other income also saw a 64 per cent fall over the year ago quarter to Rs 102.2 crore.

Adjusted for the exceptional item of Rs 260 crore, net profit came in at Rs 660 crore, which is also below street estimates. The lower profit came in despite a weak base as the company had taken a Rs 1,085 crore provision in Q4 related to change in distribution for India business.

Consolidated sales came in line with estimates at Rs 8,078 crore, up 15 per cent year-on-year led by India, global specialty and rest of the world businesses. The India business reported sales of Rs 2,365 crore for the quarter up 8 per cent over the year ago quarter adjusted for the distribution charge. Stocking by consumers due to the lockdown and launch of new products helped the company post a growth in the India business. The company expects some softening of sales due to Covid-19.

Revenues in the US market, its largest geography, came in at $375 million down 15 per cent, though the year ago period had a high base due to a one-time contribution of specialty products. Analysts at Nomura say that sales at Sun’s US subsidiary Taro bounced back quarter on quarter after recording an eight year low performance in the December quarter.

Commenting on the Q4 performance, Dilip Shanghvi, managing director said, “In terms of business performance, we have done well and have started gaining market share in India. Our global specialty business has also gained reasonable traction with Ilumya recording approximately $94 million sales globally in the first full year of commercialization. Our endeavor will be to gain market share in each of our businesses by doing better, despite the near-term uncertainties related to Covid-19."

While the results came after market hours, the Sun Pharma stock shed about 2 per cent. With pharma stocks in demand, Sun Pharma has gained 39 per cent since the start of the lockdown which is broadly in line with the gains for its peer index, BSE Healthcare.