Sun Pharma Shares Slump After Taro's Q1 Announcement

Sun Pharma shares slumped nearly 4 per cent on Thursday, following the earnings announcement of its US subsidiary Taro Pharma. Sun Pharma was among the top losers in the Nifty50 today.

Taro Pharma, which contributes 25 per cent to sales of Sun Pharma, on Wednesday reported 8.6 per cent rise in Q1 sales at $233.8 million on a smaller base. However, the company said that volumes slightly decreased. Taro Pharma's gross profit of $182.8 million increased $11 million in Q1.

"Sales from new products are beginning to accelerate. However, we continue to experience increased competitive intensity," said Kal Sundaram, CEO of Taro Pharma.


Taro's R&D expenses increased 23.2 per cent to $17.9 million, while selling, marketing, general and administrative expenses slightly decreased.

In another negative development, Taro Pharma's competitor Perrigo cut its 2016 guidance for the second time, citing higher price erosion.

Sun Pharma shares were down 1 per cent at Rs 809.20 as of 11.33 a.m., underperforming the broader Nifty that was up 0.3 per cent.