India’s top drugmaker Sun Pharma beats profit view on strong domestic demand

Sun Pharmaceutical Industries India’s top drugmaker by revenue, reported a quarterly profit above analysts estimates on Wednesday, helped by strong demand for its drugs in the domestic market.

The Mumbai-based firm’s consolidated net profit stood at 31.18 billion rupees ($354.7 million) for the quarter ended September 30, from 30.4 billion rupees last year.

That was above analysts’ average estimate of 29.97 billion rupees, according to data compiled by LSEG.

Sun Pharma’s total revenue rose 8.6% to 144.05 billion rupees, surpassing analysts’ expectations of 141.94 billion rupees.

This was helped by an 11% growth in sales in India, its largest revenue-generating region.

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Sun Pharma has been focusing on strengthening its portfolio of innovative drugs in dermatology, oncology and obesity therapy areas as it focuses on a mid-to-high single digit percentage revenue growth in the current fiscal year.

Sales of the drugmaker’s global innovative drugs, which is the company’s high-margin segment and includes medicines for conditions such as alopecia and psoriasis, rose nearly 16.4% to $333 million.

U.S. sales of innovative medicines have surpassed generics for the first time during the quarter, Kirti Ganorkar, the drugmaker’s managing director, said.

However, sales in the U.S., the second-biggest revenue generating region, declined 4.1% to $496 million.

India’s generic drugmakers derive a significant share of revenue from the United States, where lower drug prices due to stiff competition have been weighing on profit margins.

Rival Dr Reddy’s missed its September quarter profit view, while Cipla beat. However, both drugmakers reported lower U.S. sales during the quarter.