India’s largest drugmaker reported a doubling in quarterly profit that beat estimates thanks to a continued uptick in the number of doctor visits and prescriptions during the coronavirus pandemic.
Sun Pharmaceutical Industries Ltd. posted net income of 18.5 billion rupees ($254 million) for the quarter ended Dec. 31, higher than the 13.8 billion-rupee average estimate in a Bloomberg survey of analysts. Revenue rose to 88.4 billion rupees versus the estimated 87.8 billion rupees, according to an exchange filing on Friday. Total costs grew 1%.
Billionaire owner Dilip Shanghvi has invested heavily in specialty treatments in the U.S. over recent years, Sun’s top market along with India. But it was emerging markets and other regions that saw the most significant sales growth in the proceeding quarter, as patients sought out treatments even as many countries were hit by further waves of the coronavirus.
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Sun’s shares jumped more than 4% after the results, erasing the day’s losses.
“Sun Pharma should benefit from growth of specialty portfolio and revival in growth in the domestic market,” Vishal Manchanda, a pharmaceutical industry analyst at Mumbai-based brokerage Nirmal Bang, wrote in a report this month. “Sun Pharma has also been able to ramp up the share in Lialda during the quarter in the U.S.,” he said, referring to a drug used to treat inflammatory bowel disease.
The coronavirus outbreak has also helped drive gains in sector stocks in 2020 after two years of muted returns, with investors betting on the possibility of India emerging as a key player in vaccine development and global supply.
{{/usCountry}}The coronavirus outbreak has also helped drive gains in sector stocks in 2020 after two years of muted returns, with investors betting on the possibility of India emerging as a key player in vaccine development and global supply.
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The S&P BSE Healthcare Index advanced 61% last year, the most among the nation’s sector sub-indexes and the best for the gauge since 2009. However, it’s down more than 4% so far this year, compared with Sun’s 1.8% decline in the same period.
In India, with “clinics now open across the country and medical reps on the ground, we expect Sun Pharma to go back to its growth trajectory of outperforming the market by 100-200 basis points on the back of their leadership across therapies,” Nithya Balasubramanian, the Mumbai-based head of health-care research at Bernstein India, wrote in a report this month.