India’s Sun Pharma reports higher adjusted quarterly profit on strong domestic demand

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(Reuters) -Sun Pharmaceutical Industries, India’s largest drugmaker by revenue, reported a higher adjusted profit on Thursday, aided by strong domestic sales.

The Mumbai-based firm’s consolidated profit before tax and exceptional items rose 16.6% to 39.91 billion rupees ($455.6 million) in the quarter ended June 30.

The drugmaker reported a one-time charge of 8.18 billion rupees in the first quarter related to the impairment of certain assets and the settlement of a legal dispute.

Accounting for the charge, profit fell nearly 20% on-year.

Total revenue grew 9.5% to 138.51 billion rupees, beating analysts’ estimates of 136.51 billion rupees. The rise in revenue was supported by a 14% increase in sales in India, Sun Pharma’s largest revenue-generating region.

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

Sales from its high-margin global innovative segment, which includes drugs used to treat rare and complex chronic conditions such as hair loss and psoriasis, rose 16.9% and accounted for 19.3% of the total.

Its U.S. sales climbed 4% to 40.45 billion rupees. While India’s generic drugmakers derive a significant share of revenue from the United States, pricing pressures due to stiff competition continue to weigh on profit margins.

($1 = 87.6000 Indian rupees)

(Reporting by Rishika Sadam in Hyderabad and Kashish Tandon in Bengaluru; Editing by Sonia Cheema)