Sun Pharmaceutical Industries reported a 15 percent year-on-year rise in its consolidated net profit to Rs 2,903.4 crore for the third quarter of FY25, in line with Street estimates. The company's revenue grew 10 percent on-year to Rs 13,675.5 crore during the October-December period, supported by strong growth in the domestic and emerging markets businesses.
The board declared an interim dividend of Rs 10.5 per share, with the record date set as 6 February 2025 and payment scheduled on or before 20 February 2025. Following the results, Sun Pharma shares whipsawed, and ended up 0.8 percent on NSE at Rs 1,753.
The drugmaker's EBITDA rose 15.3 percent year-on-year to Rs 4,009 crore, with its EBITDA margin improving to 29.3 percent, it said in a statement. During the quarter, Sun Pharma booked exceptional expenses of Rs 316.2 crore, primarily related to settlement costs in the National Prescription Opiate Litigation in the US.
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The company clarified that the settlement was agreed upon in principle, with no admission of wrongdoing. It continues to defend related legal matters in the US and Canada that were not part of the consolidated litigation.
India, emerging markets drive growth
Sun Pharma's domestic formulations business, which contributes about a third of its total revenue, saw a 13.8 percent increase in sales to Rs 4,300.4 crore in Q3 FY25. The company said it launched 12 new products in the Indian market during the quarter. Sun Pharma continues to hold its position as the top-ranked player in the Indian pharmaceutical market, with its market share rising to 8.2 percent from 7.8 percent, according to AIOCD AWACS data.
The emerging markets segment also reported strong growth, with formulation sales rising 10.1 percent year-on-year to $277 million, contributing 17 percent to the company’s total revenue. The rest of the world (RoW) business, which includes all markets outside of India, the US, and emerging markets, saw a robust 21 percent rise in sales to $259 million.
US business declines, exceptional charge booked
In contrast, Sun Pharma’s US formulations business posted a marginal decline, with sales slipping 0.7 percent year-on-year to $474 million, contributing about 30 percent to overall revenue. The US remains the company’s largest market, but growth was impacted by pricing pressures and regulatory challenges.
The company's global specialty business, a key focus area, generated $370 million in sales, including a $45 million milestone payment. Excluding the milestone impact, specialty sales rose 17.5 percent and accounted for 21 percent of total revenue for the quarter.
R&D investments and management commentary
Sun Pharma's R&D spending stood at Rs 845 crore for the quarter, marginally higher than Rs 824.5 crore in the same period last year. The company continues to focus on expanding its specialty and generic pipeline, with seven novel entities undergoing clinical trials. Sun Pharma filed six new ANDAs (abbreviated new drug applications) in the US during the quarter and received two approvals.
Chairman and Managing Director Dilip Shanghvi said, “Our market share gain in India has been driven by industry-leading volume growth. Emerging markets demonstrated strong performance in spite of currency challenges across geographies. All our businesses remain well-positioned for the future.”
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