Moneycontrol
Last Updated : Aug 10, 2018 11:46 AM IST | Source: Moneycontrol.com

Taro Pharma Q1 profit up 23% to $67.3m; operational income dips 19%

Net sales during the quarter fell 4.2 percent to $154.6 million compared to $161.3 million in same period last fiscal.

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Merck | Year to date change : 94% (Image: Reuters)
Merck | Year to date change : 94% (Image: Reuters)
 
 
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Taro Pharmaceutical Industries, the US subsidiary of Sun Pharma, has reported a 23.5 percent year-on-year growth in first quarter net income to $67.3 million despite weak revenue and operational performance, and higher tax cost.

The growth was largely attributed to foreign exchange gain and finance income. Profit in the year-ago period stood at $54.5 million.

"We continue to face an overall market trend, particularly in the US, that is not dramatically changing, and depending on the product(s), price deflation continues to be a challenge," Uday Baldota, Taro's CEO said.

He further said the company continued to maintain a development pipeline investing only in those products which are viable.

Net sales during the quarter fell 4.2 percent to $154.6 million compared to $161.3 million in same period last fiscal.

"The decline in net sales was due to continuing increased competition and the challenging pricing environment; despite an overall increase in volumes of 11.1 percent," Taro said in its statement.

Operating income also declined 18.7 percent year-on-year to $63.2 million and margin contracted by 730 basis points to 40.8 percent for the quarter ended June despite fall in R&D and SMGA (selling, marketing, general and administrative) expenses.

Research & development expenses in Q1 dropped 8.9 percent to $13.3 million and SMGA cost fell 2.7 percent to $23.6 million while tax expenses jumped 41 percent to $14.1 million YoY with the effective tax rate increasing to 17.3 percent from 15.5 percent.

The company earned foreign exchange gain of $9.96 million in Q1FY19 against expenses of $19.6 million. Interest and other financial income increased 74.3 percent to $7.8 million YoY.

Taro said as of June 2018, cash, including short-term and long-term bank deposits and marketable securities, increased $63.6 million to $1.7 billion from March 2018. "Cash reflects the $24.7 million impact from the company’s share repurchases during the current quarter."

At 11:12 hours IST, the stock price was quoting at Rs 557.00, down Rs 13.70, or 2.40 percent on the BSE.
First Published on Aug 10, 2018 11:31 am
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