Sun Pharma Q3 profit falls 75% to Rs 365 cr on tax cost; operating income tanks 41%

Sun Pharma's third quarter earnings disappointed analysts on Wednesday as profit fell sharply by 75.2 percent to Rs 365.4 crore, dragged by exceptional tax expenses.

It was far lower than CNBC-TV18 poll estimates of Rs 878.3 crore. Profit in year-ago period stood at Rs 1,471.82 crore.

"Tax expenses (exceptional) for the quarter represented estimated impact of Rs 513.02 crore on account of re-measurement of the group's deferred tax assets as a result of the Tax Cut and Jobs Act enacted in the US on December 2017," the pharma major said in its filing.

Revenue from operations slipped 16 percent year-on-year to Rs 6,653.23 crore in Q3 was also lower than expectations of Rs 6,807 crore.

Tax expenses for the quarter at Rs 235.7 crore declined 36.8 percent from Rs 372.92 crore in year-ago.

Consolidated operating profit degrowth of Rs 40.8 percent year-on-year Rs 1,453.4 crore and margin decline of 910 basis points at 21.8 percent for December quarter 2017 were lower than CNBC-TV18 poll estimates of Rs 1,434.8 crore and 21.1 percent, respectively.

Total expenses for the quarter were lower by 5 percent year-on-year at Rs 5,634.5 crore due to fall in finance, raw material costs and other expenses.

The stock price closed down 2.53 percent at Rs 574.45 ahead of earnings announced after market hours.