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Sun Pharma: Regulatory issues get more serious - Views on News from Equitymaster
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Sun Pharma: Regulatory issues get more serious
Nov 17, 2015

Sun Pharma has announced its 2QFY16 results. The company has reported a 14.7% YoY decline in the topline, while net profits plummeted by 46% YoY. Here is our analysis of the results.

Please note, the financials for 2QFY16 include one-time expenses and exceptional costs related to the remedial process going in its Halol plant and integration of the Ranbaxy business. Thus, the current performance is not strictly comparable with 2QFY15. Both these quarters include the financials of erstwhile Ranbaxy Laboratories Ltd.

Performance summary
  • Net sales declined by 14.7% YoY, due to poor growth in most of its business verticals.
  • The EBITDA margins were down by 9.9% to 28.3% during the quarter. The operating expenses include various costs pertaining to restructuring and integration.
  • The bottomline plunged by 46% YoY because of the overall poor performance.

Financial performance: A snapshot

(Rs m) 2QFY15 2QFY16 Change 1HFY15 1HFY16 Change
Net sales 79,793 68,033 -14.7% 142,927 133,255 -6.8%
Other operating income 601 343 -42.9% 879 2,697 206.9%
Expenditure 49,732 49,039 -1.4% 93,763 98,118 4.6%
Operating profit (EBDITA) 30,662 19,337 -36.9% 50,043 37,834 -24.4%
EBDITA margin (%) 38.1% 28.3%   34.8% 27.8%  
Other income (309) 1,913 -718.6% 1,510 2,967 96.5%
Interest (net) 1,617 1,484 -8.2% 3,106 2,713 -12.6%
Depreciation 2,691 2,711 0.8% 5,045 5,113 1.3%
Profit before tax 26,045 17,055 -34.5% 43,402 32,975 -24.0%
Exceptional (loss) - -   (2,378) (6,852)  
Minority Interest 2,749 2,633 -4.2% 7,375 4,644  
Tax 2,794 3,355 20.1% 7,027 5,623 -20.0%
Profit after tax/(loss) 20,502 11,067 -46.0% 26,622 15,856 -40.4%
Net profit margin (%) 25.7% 16.3%   18.6% 11.9%  
No. of shares (m)         2,407.0  
Adj Diluted earnings per share (Rs)         18.8  
Price to earnings ratio (x)*         39.5  

*based on trailing 12 months earnings

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