Sun Pharma beats Q2 profit view on higher demand for specialty drugs

Sun Pharmaceuticals, India's largest drugmaker by revenue, reported second-quarter profit above analysts' estimates on Monday, aided by higher demand for its specialty drugs that are used to treat uncommon medical conditions.

The Mumbai-based firm's net profit rose 28 per cent to Rs 30.40 billion (nearly $362 million) for the three months ended Sept. 30, beating analysts' estimate of Rs 28.87 billion, according to data compiled by LSEG.

The company's high-margin global specialty pharmaceutical segment, which includes medicines for diseases such as alopecia and psoriasis, reported a 19.2 per cent jump in sales to $286 million. This segment, which Sun Pharma calls 'high growth', contributed to more than 18 per cent of its total sales in fiscal year 2024.

Sun Pharma, which also makes copycat generic drugs and branded versions, reported a 9 per cent rise in revenue to Rs 132.91 billion for the second quarter, driven by sales in the U.S. - its biggest market - and India, which jumped 21.9 per cent and 11 per cent, respectively.

However, its revenue still fell short of analysts' expectation of Rs 133.3 billion.

Generic drugmakers have been struggling with a slowdown in the U.S. due to delayed approvals for new generic drug applications, lower pricing amid stiff competition and increased inspections of generic drug manufacturing facilities by the Food and Drug Administration, according to analysts.

"We look for growth drivers beyond India and U.S. generic market... We expect innovative (drug) revenues to more than double for Sun over (the) next four years," research firm UBS said.

The company's shares rose as much as 2.4 per cent after its results.