Despite setbacks in regulated markets, such as the US, Indian pharma majors have managed to achieve better revenue growth on the back of increased sales in the domestic market. Majors such as Sun Pharma, Glenmark and Cipla witnessed a decline in their global sales, but maintained a growth in sales revenue in India. However, Lupin managed to achieve both, a better global and domestic sales for the quarter ended December 2009.
Sun Pharma?s sales of branded prescription formulations in India were at Rs 533 crore for the December quarter, a 24% growth over the same period of the previous year. However, in its US subsidiary Caraco, revenues declined by 7% to touch $52 million in the same period. Incidentally, Caraco reported a net loss of $3 million for the period.
Sun?s formulation exports slipped by 12.8% in the December quarter over the year-ago period mainly due to lower pantoprazol supplies and Caraco?s US FDA issues.
Nimish Desai of Motilal Oswal Securities reckons, ?Unresolved US FDA issues related to Caraco?s manufacturing facilities will continue to impact sales in the US and pending ANDA (abbreviated new drug application) approvals from that facility.? Overall, Sun reported net sales at Rs 1,021 crore, up 11 % over the December 2008 quarter. Its Ebitda margins declined to 36% from 45% reported in the year-ago period. Similarly, the net profit dipped 17% in the period under review.
In the case of Glenmark, revenues were adversely impacted by 10% in generics business to Rs 200 crore. The branded formulation business reported a 11.5% growth primarily on an annual basis and a 17.5% annual growth in Indian formulation segment. Glenmark, whose formulations export declined 4% at Rs 356 crore, witnessed a 10% decline in US sales at Rs 188.6 crore. Its Latin American sales declined 35% at Rs 35 crore. Its overall domestic sales grew by 16.7% at Rs 212 crore while formulations sales grew by 17.5% at Rs 184 crore. Glenmark?s net earnings grew by 61.2% to Rs 94 crore thanks to its licensing income of Rs 23.2 crore from Medicis and also due to tax savings.
Lupin remains the only major player who achieved a growth in top-line with help of sales from global markets. Sales in India contributed 27% to its overall revenues during the quarter. Net sales of the India region formulations grew by 21% to Rs 344.6 crore during the third quarter. Advanced markets formulation sales (including the US, Europe & Japan) increased 35% to Rs 642.6 crore. It contributed 51% of the net sales for the quarter. Net sales grew by 31% to Rs 1,255 crore from Rs 962 crore.
Top line of another major, Cipla, was impacted by lower anti-retroviral drug exports. Cipla had reported net sales growth of 7.2% at Rs1438.5 crore (estimation of Rs 1520 crore) against Rs 1,342 crore. Revenue growth was below estimates due to a 2.5% decline in formulation exports to Rs 580 crore (40% of total income) primarily owing to a management decision of not participating in some of the non-remunerative tenders for supply of anti-AIDS drugs (ARVs).
Piramal Healthcare saw a 21% growth in domestic formulation sales, which contribute 55% of the sales at Rs 500 crore. The lower-than-expected growth of revenues came on the back of subdued performance in the Pharma Solution (CRAMS) and Piramal Critical Care (PCC) segments.