Moneycontrol
Aug 09, 2017 02:01 PM IST | Source: Moneycontrol.com

Sun Pharma tanks 5% on disappointing performance from subsidiary Taro

Operating income in Q1FY18 was down 45 percent at USD 77.6 million and margin contracted to 48.1 percent from 61 percent on year-on-year basis.

Sun Pharma tanks 5% on disappointing performance from subsidiary Taro

Moneycontrol News

Healthcare major Sun Pharmaceutical Industries fell sharply by 5 percent intraday Wednesday to hit a 52-week low of Rs 475.40 following dismal performance from its subsidiary Taro.

Taro Pharmaceutical's profit in April-June quarter plunged 50 percent to USD 54.5 million, dented by continued pricing pressure in the US.

Net sales declined 31 percent to USD 161.3 million from USD 233.8 million on year-on-year basis on continuing increased competition and the challenging pricing environment; despite an overall increase in volumes.

"Results reflect the difficult generic pricing environment, particularly in the US, driven by more intense competition among manufacturers, new entrants to the market, buying consortium pressures, and a higher ANDA approval rate from the FDA," Abhay Gandhi, Taro’s interim CEO said.

Taro expects this product-specific pricing pressure to continue into the future.

Operating income in Q1FY18 was down 45 percent at USD 77.6 million and margin contracted to 48.1 percent from 61 percent on year-on-year basis.

Research and development (R&D) expenses declined by USD 3.3 million to USD 14.7 million; as R&D spending is not evenly distributed across quarters, the company said.

R&D as a percentage of net sales increased to 9.1 percent from 7.7 percent in the previous year quarter.

Taro said foreign exchange expenses increased by 232 percent year-on-year to USD 13.7 million, principally due to the weakening of the US dollar against Canadian dollar at a higher degree than the prior year quarter.

At 13:42 hours IST, the stock price was quoting at Rs 479.45, down Rs 20.95, or 4.19 percent on the BSE.

Posted by Sunil Shankar Matkar
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