Sun Pharmaceuticals Industries Limited = RESULTS FOR Q3 FY 2011 = QTR ENDING DECEMBER 2010 = SALES UP; PROFITS FLAT

Sun Pharmaceuticals Industries Limited

NSE Symbol     SUNPHARMA

SUN PHARMA has declared its consolidated results for the Q3 FY 2011. The consolidated Results are analyzed  below :

Net Sales is Rs.1601 cr – up by 16.86% from Q2 FY 11; Up by 14.39% from Q1 FY 11; and also up by 56.84% from Q3 FY10.

Total Expenditure   is Rs.1241 cr – up by 32.27% from Q2 FY 11; Up by 50.62% from Q1 FY 11; and also up by 80.29% from Q3 FY 10.

Profit from Operations  is Rs.360 cr – down by 16.63% from Q2 FY 11; down by 37.46% from Q1 FY 11; but up by 8.28% from Q3 FY 10;

Profit before tax is Rs.418 cr – down by 20.25% from Q2 FY 11; down by 28.82% from Q1 FY 11; but UP by 14.55% from Q3 FY 10.

Net Profit  is Rs.364 cr – which is down by 28.29% from Q2 FY 11; and down by 37.05% from Q1 FY 11; but up by 7.28% from Q3 FY 10.

Consolidated Net Profit is Rs.350 cr – down by 30.48% from Q2 FY 11; down by 37.95% from Q1 FY 11; but is up by 3.3% from Q3 FY 10.

Face Value (in Rs.) of the share has come down to Rs.1 in Q3 FY 11 from Rs.5 earlier.

Basic EPS (in Rs.) is at Rs.3.4 on FV of Rs.1, while it was Rs.24.3 in Q2 FY 11; Rs.27.2 in Q1 FY 11 and Rs.16.4 in Q3 FY 10 on FV of Rs.5.

Current Market Price is Rs.417 on FV of Rs.1. Annualised EPS is around  Rs.13.8 (3.4 x 4). Thus, PE Ratio works out to 31.6.

Sun Pharma is no doubt getting US FDA approvals for its new generic products  at regular intervals. Hence, it can improve its present profitability regularly in future.

CONSOLIDATED RESULTS TABLE :

SUN PHARMA-CONSOL	Q3 FY 11	Q2 FY11	Q1 FY11	Q3 FY 10
Net Sales	160107	137007	139970	102086
Net Sales	1601	16.86	14.39	56.84
Incr./Decr. in SIT/WIP	807	5322	-7435	-5397
Raw Materials	37420	28002	36919	28716
Traded Goods	5012	4620	4083	5264
Employees Cost	27537	14558	12461	11625
Depreciation	8047	3518	4020	3580
Other Expenditure	45278	37801	32345	25046
Total Expenditure	124101	93821	82393	68834
Total Expenditure	1241	32.27	50.62	80.29
Profit from Operations	36006	43186	57577	33252
Profit from Operations	360	-16.63	-37.46	8.28
Other Income	2579	5559	-876	914
Interest	-3222	-3678	-2032	-2331
Profit before tax	41807	52423	58733	36497
Profit before tax	418	-20.25	-28.82	14.55
Tax Expense	5448	1721	970	2605
Net Profit	36359	50702	57763	33892
Net Profit	364	-28.29	-37.05	7.28
Minority Interest	1344	337	1331	-3
Consolidated Net Profit	35015	50365	56432	33895
Consolidated Net Profit	350	-30.48	-37.95	3.3
Face Value (in Rs.)	1	5	5	5
Paid-up Equity	10356	10356	10356	10356
Basic EPS (in Rs.)	3.4	24.3	27.2	16.4
Public holding (%)	36.29	36.28	36.28	36.29

WHAT COMPANY SAYS :

Highlights of Q3 FY11 consolidated financials

• Net sales / income from operations at Rs. 1601 crores, growing 57% over Q3 FY10. This is on account of Taro financials being included this quarter but not in the same quarter last year.

• India branded generic sale at Rs 640 crores, registering a growth of 20% over same quarter last year

• Caraco sales at $ 40 million, down 22% from Q3 FY10

• Taro sales at $ 102 million, a growth of 23% over same quarter last year

• EBITDA at Rs 440 crores, resulting into a margin of 28%

• Net profit at Rs. 350 crores, resulting into a net margin of 22%.

According to Dilip Shanghvi, Chairman and Managing Director of the Company, “Overall performance across most markets continues to be in line with our expectations. Medium to long term priorities remain focused on building a stronger presence in our key as well as emerging markets. Towards this we continue to invest in enriching our product pipelines for each of the business segments, work towards gaining market share in key products and therapy areas as well as enhancing our capability to meet the exacting regulatory standards across the world. Improving Taro’s long term sustainability and growth potential is work in progress, even as we continue to evaluate other strategic opportunities.”

India Branded Prescription products – Growth continues

Sales of branded prescription formulations in India were at Rs. 640 crores for the third quarter, a growth of 20% over the same quarter last year, and accounting for 40% of total sales. For the first 9 months, India formulation sales were at Rs. 1880 crores, a growth of 43% over the first 9 months of last year. This high growth is partly attributable to the lower base in the first half of FY10.

In 2010, as per IMS ORG report, the Indian Pharma market has grown by 17% while Sun Pharma has grown by 18% and now holds 3.7% market share. Based on data compiled by AWACS, Sun Pharma has grown by 23% in 2010 and has a market share of 4.4%. AWACS too estimates Indian Pharma market growth at 17% in 2010.

9 key products were launched during the quarter, taking the total for the first nine months to 30. Overall, the company is ranked no. 1 based on share of prescriptions with 6 classes of specialists: psychiatrists, neurologists, cardiologists, ophthalmologists, orthopedics and gastroenterologists.

US Generics – Challenges remain

This is the first quarter in which Taro financials for the entire quarter are consolidated into Sun Pharma financials. Taro recently announced its unaudited financials for the Oct-Dec quarter. Net sales for Oct-Dec quarter is at $ 102 million, a growth of 23% over same period last year, while the net profit for the quarter is at $ 4.4 million, lower by 95% when compared to the same quarter last year. This fall is primarily on account of a large tax expense in this quarter.

In Dec 2010, Taro completed the audit for CY2008 and filed its audited financials for that year. The difference between the audited net profit and the unaudited net profit disclosed earlier is significant. Audited net profit at $ 30.6 million is lower by 31% when compared to the unaudited net profit announced earlier of $ 44.4 million. This is largely attributable to lower net sales of $ 7.7 million and higher expenses of $ 6.2 million.

Caraco, the other listed subsidiary in US, recently announced its Q3 FY11 sales of $ 40.4 million, down 22% from the same quarter last year. Caraco recorded a net loss of $ 3.0 million for Q3 FY11. For the first 9 months of FY11, Caraco reported sales of $ 268.2 million and net loss of $ 3.3 million.

Research – Strengthening the future

In the Oct-Dec quarter, ANDAs for 5 products have been filed by Sun Pharma. With this, in the first 9 months, ANDAs for a total of 13 products have been filed by Sun Pharma and Caraco. During this quarter, ANDAs for 2 products from Sun Pharma have been approved taking the total approvals to 12 in the first nine months. In addition, Taro has filed ANDAs for 2 products and received approval for 1 in Oct – Dec quarter. Counting all of these and 3 filed ANDAs withdrawn during the year, ANDAs for 369 products have been filed across Sun Pharma, Caraco and Taro, of which 220 have been approved by the USFDA as on December 31, 2010. Of the balance 149 awaiting approval, 20 have tentative approvals.

Consolidated R&D expense for Q3 FY11 is Rs. 99 crores, or 6.2% of income from operations. For the first 9 months, the consolidated R&D expense is Rs. 233 crores, or 5.3% of income from operations.

Strengthening our API pipeline, a cumulative of 201 DMF / CEP applications have been made, with 127 approved so far.

This includes a total of 35 applications from Taro, of which 25 are approved. The total number of patent applications submitted for Sun Pharma now stands at 257 with 85 patents granted so far.

ANNOUNCEMENTS

TO THE NSE

03-02-2011      Sun Pharmaceuticals Industries Limited has informed the Exchange regarding a press release dated February 03, 2011, titled "Sun Pharma announces USFDA approval for generic Razadyne ER".

31-01-2011      Sun Pharmaceuticals Industries Limited has informed the Exchange regarding the standalone Results for the quarter ended on 31-DEC-2010 as follows: Net Sales of Rs. 45826 lacs for quarter ending on 31-DEC-2010 against Rs. 48964 lacs for the quarter ending on 31-DEC-2009. Net Profit / (Loss) of Rs. 34267 lacs for the quarter ending on 31-DEC-2010 against Rs. 31804 lacs for the quarter ending on 31-DEC-2009.        -

31-01-2011      Sun Pharmaceuticals Industries Limited has informed the Exchange regarding the consolidated Results for the quarter ended on 31-DEC-2010 as follows: Net Sales of Rs. 160107 lacs for quarter ending on 31-DEC-2010 against Rs. 102086 lacs for the quarter ending on 31-DEC-2009. Net Profit / (Loss) of Rs. 35015 lacs for the quarter ending on 31-DEC-2010 against Rs. 33895 lacs for the quarter ending on 31-DEC-2009.

06-12-2010      Sun Pharmaceuticals Industries Limited has informed the Exchange that on December 03, 2010, Sun Pharmaceutical Industries Ltd (Sun Pharma), and Sun Pharma Global (Sun Global, a wholly owned subsidiary of Sun Pharma) delivered a letter to Sun Pharma's U.S. subsidiary, Caraco's Board of Directors proposing a going-private transaction by which Sun Pharma, Sun Global and/or one or more of their affiliates would acquire all of the outstanding shares of the Common Stock of Caraco not held by Sun Pharma or Sun Global for per share consideration of $ 4.75 in cash representing a 5% premium over the most recent closing price of Caraco common stock. This offer is subject to the approval of Caraco Board and such other authorities as may be required and subject to completion of necessary compliances/formalities as may be required. -

30-11-2010      Sun Pharmaceuticals Industries Limited has informed the Exchange regarding a press release dated November 30, 2010 , titled " Sun Pharma announces USFDA tentative approval for generic Aricept."

25-11-2010      Sun Pharmaceuticals Industries Limited has informed the Exchange regarding a press release dated November 24, 2010, titled "Sun Pharma announces USFDA tentative approval for generic Cymbalta".

18-11-2010      Sun Pharmaceuticals Industries Limited has informed the Exchange regarding press release dated November 18, 2010, titled "Sun Pharma announces USFDA approval for generic Diltiazem ER". and "Sun Pharma announces USFDA approval for generic Clarinex".

01-10-2010      Sun Pharmaceuticals Industries Limited has informed the Exchange regarding a press release dated October 01, 2010, titled "Sun Pharma announces USFDA tentative approval for generic Stalevo(R)".

30-09-2010      Sun Pharmaceuticals Industries Limited has informed the Exchange regarding a press release dated September 29, 2010, titled "Sun Pharma announces USFDA tentative approval for generic Crestor(R)".

28-09-2010      Sun Pharmaceuticals Industries Limited has informed the Exchange regarding a press release dated September 28, 2010, titled "Sun Pharma announces USFDA tentative approval for generic Rilutek".

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