Sun Pharma has issued a profit warning for this fiscal. The move is likely to spook investors as such a thing - like a mid-quarter warning - has never happened before. The company expects revenues to remain flat or show a decline as the Ranbaxy integration is expected to increase its costs.
The consolidated profit in addition to revenue may also be adversely impacted due to certain expenses/ charges arising out of integration and remedial actions. Above initiatives is likely to help the company to revert to more sustainable growth trajectory post FY16.
The company expects to incur certain integration (Ranbaxy) charges. Post the consolidation, the company will be better placed to achieve higher than industry growth in subsequent years. Sun Pharma may decide to discontinue some non-strategic businesses.
Sun Pharma has also undertaken several remedial measures to address Current Good Manufacturing Practices (cGMP) deviations at its Halol facility. These measures habe resulted in supply constraints for some of the products. The situation is likely to continue for some more time till all remedial steps at Halol are completed. Remedial measures at Mohali, Dewas, Poanta Sahib and Toansa too are on track. The company is working towards fulfilment of consent decree and is trying to expedite resolution for at least one of these facilities.
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