Oct 30 (Reuters) – India’s Sun Pharmaceutical Industries reported a drop in second-quarter profit on Friday, as a one-time charge largely tied to its planned acquisition of Organon weighed, though demand for specialty medicines remained strong.
The country’s top drugmaker by revenue posted a consolidated net profit of 19.89 billion rupees ($209.31 million) in the quarter ended September 30, down from 31.18 billion rupees a year earlier.
Despite this, shares jumped 4.2% to 1,835 rupees after the results.
The drugmaker, which has been expanding its portfolio of higher-margin specialty treatments for skin diseases, cancer and obesity to offset pressure in the US, posted a 6.9% rise in specialty sales to $356 million. The segment accounted for 21.1% of total sales.
Growth was supported by a 17.3% increase in sales in India, Sun Pharma’s largest market, while US sales declined 8.2%.
Overall revenue rose nearly 12% to 161.99 billion rupees, exceeding analysts’ average estimate of 158.25 billion rupees.
Sun Pharma booked a one-time charge of 12.69 billion rupees, largely related to acquisition costs for its planned purchase of Organon and provisions linked to India’s labour code framework.
Excluding the charge, profit rose 6.3% to 44.28 billion rupees.
The drugmaker has also been pursuing acquisitions to strengthen its US presence. Earlier this year, it agreed to buy drugmaker Organon & Co for $11.75 billion, making it one of the largest overseas acquisitions by an Indian pharmaceutical company.
($1 = 95.0250 Indian rupees)
(Reporting by Kashish Tandon in Bengaluru; Editing by Jochelle Mendonca and Sonia Cheema)
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