Sunpharma

In: Business and Management

Submitted By vicky7777
Words 11935
Pages 48
July 17, 2009 | Pharmaceuticals

Initiating Coverage

Sun Pharmaceuticals (SUNPHA)
In the pit stop…
Sun Pharma (SPIL) is a leading player in the Indian pharma space. Strong focus on cost control, impressive pipeline for the US, strong foothold in domestic markets and a clean & strong balance sheet are the major investment planks of SPIL. We also like its strategy of buying distressed assets and turning it around via strong management bandwidth. We are initiating coverage on SPIL with a PERFORMER rating.

Current Price Rs 1221 Potential upside 10 %

Target Price Rs 1344 Time Frame 12-15 months

PERFORMER
Analysts’ Name Raghvendra Kumar raghvendra.kumar@icicidirect.com Ashish Thavkar ashish.thavkar@icicidirect.com Sales & EPS trend
6000 4000 2000 0 FY10E FY11E FY05 FY06 FY07 FY08 FY09 Sales (Rs cr) EPS (Rs) 120 80 40 0

Selective strategy for regulated markets prevents margin contraction
SPIL’s US strategy places the company among one of the highest margin earners in the industry. We estimate SPIL’s US revenue to degrow ~27% on account of recent seizure of 33 Caraco products. However, speedy approval from its portfolio of 108 ANDAs (mostly differentiated ANDAs) pending approval will likely cushion steeper fall in US revenues (we have not factored such revenue in our estimates). Such approvals will likely help maintain margins and US revenue

Strong foothold in domestic chronic segment earns highest margins
SPIL generates one of the highest EBITDA margins (GC ~70-75%) in the industry. This is on account of its strong foothold in niche therapies such as CNS, CVS, diabetes, etc, which contribute ~75-80% of its domestic formulations revenue

Stock Metrics
Bloomberg Code Face Value (Rs) Promoter holding (%) Market Cap (Rs Cr) 52W - H/L Sensex Average Volume SUNP@IN 5.0 63.7 25,289 1600/953 14253 48,321

Clean & debt-free balance sheet with strong…...

Similar Documents

Monetary Policy

...Interest rate finally turns positive. 2nd April 2013 • India’s hydel-power crisis • India slips to second to Nielson confidence index Pessimistic economic environment caused consumer confidence tumbled. • Jet Airways raises 300 million by ECB route • RBI may sweeten rate cut with CRR reduction by 25 bps A slowdown in inflation, economic growth languishing at a decade low 5% & expectations of a lower Current A/C Deficit thanks to cooling global commodity prices have spurred expectations for less hawkish guidance from RBI governor as compared to December where there was a little room for policy easing. • FII moving out of RIL, Infosys A total of 191 FII has left Reliance Industries alone, Infosys is also not an exception, while sunpharma, ITC, and TCS has a large number of FII coming in. • Gains or losses on Commexes won’t be treated as speculative Hedgers & punters will now be able to set off losses or gains made in commodity futures against business profit or loss or those made in stock derivatives – provision included in Finance Bill FY14. • Stocks beats bond for second month As gold & copper slump, investors' equity bets amid unprecedented economic stimulus. • Account Deficit to fall to 2.5% in 3 years • Not just growth, Austerity bad for health also 7th May 2013 • Mid caps soar in. What may be an early hint of a rally Stocks up 10 - 20x on strong Q4 hopes; Valuation gap with large caps also creates opportunities. • Hopes turn around as 3 Net cos plan......

Words: 1555 - Pages: 7

Ranbaxy

...most popular and star product. In 2013, US FDA slapped USD 500 million and banned drugs in US fron ranbaxy‟s four drugs. Ranbaxy in its effort to gain U.S. market, lost its share in the highly competitive domestic market. Its sloppy performace in the domestic market and fine imposed on it by US FDA led it to a loss of -180 million. To salvage itself, Ranbaxy merged with Sun pharmaceutical in 2014 creating world‟s fifth largest pharmaceutical company.  Recommended Strategy for Sunpharma after its merger with Ranbaxy 1) SunPharma needs to improve the processes and procedures of Ranbaxy 2) Ranbaxy‟s tarnished image, by a series of non-compliances and ban imposed by USFDA, needs to be resurrected by taking effective measures in the direction of positive brand building. 3) Ranbaxy‟s merger with Sun Pharma will help it to sustain in the pharmaceutical market and it needs to synergize its resources with sun Pharma. 4) Remediation of Manufacturing facilities by sun Pharma by utilising combined expertise. 5) SunPharma can restructure Ranbaxy and break it away from the unproductive unionised employees. 6) It needs to balance its presence in both the global and local pharma market with Ranbaxy‟s portfolio. 7) Integration Planning & leadership teams need to be formed by sun Pharma in consultation with Ranbaxy Management. Page 27 of 41 Strategy Formulation & Implementation Ranbaxy Laboratories Ltd 7) References: 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. 18.......

Words: 11886 - Pages: 48

Executive Summary

...Executive Summary Background Sunpharma, as a pharmaceutical company, is going to modify its business model to base revenue on customer satisfactory. -Strengths & Opportunities -Threats & Weakness 1. Wider products assortment 1. Shortage of competent pharmacists 2. Good relationship with business partners 2. Fierce competition 3. Corporation cultural focus on people 3. Pharmacist lack of “soft skills” 4. Self-service design 5. Upcoming favorable legislation HR challenges and recommendations After fully understand the current environment, HR faces external challenges such as constrained workforce, fierce competition and unfavorable current law. Conditions within the organizations are insufficient budget, uncooperative pharmacists and invalid customer service management. Aligning the environment, HR implements the firm’s strategy and develops policies and practices to support the company change, including the improvement of performance appraisal and payroll system, development of the learning organization, enhancement of the employee relations and partnership with universities. Implementation plan -Hire professionals from outside to held seminars and online resources: The seminar will include communication, sales, and interpersonal skills. We will......

Words: 403 - Pages: 2

Financial Management Project

...at a CAGR of 12.79 per cent in 2015 from US$ 6 billion in 2005, and is expected to expand at a CAGR of 15.92 per cent to US$ 55 billion by 2020 * By 2020, India is likely to be among the top three pharmaceutical markets by incremental growth and sixth largest market globally in absolute size * India’s cost of production is significantly lower than that of the US and almost half of that of Europe. It gives a competitive edge to India over others. Companies that we have selected are as follows: 1. Sun Pharmaceuticals Industries Ltd 2. Dr Reddy Laboratories 3. Cipla 4. Cadila Healthcare Ltd 5. Aurobindo Pharma Ltd 1. SUN PHARMACEUTICALS INDUSTRIES LTD: Sun Pharmaceutical Industries Limited (NSE: SUNPHARMA, BSE: 524715) is an Indian multinational pharmaceutical company headquartered in Mumbai, Maharashtra that manufactures and sells pharmaceutical formulations and active pharmaceutical ingredients (APIs) primarily in India and the United States. The company offers formulations in various therapeutic areas, such as cardiology, psychiatry, neurology, gastroenterology and diabetology. Dividend Policy of Sun Pharmaceuticals: 1. Company is not paying out dividends (DPS decreased) and adding in its reserves and surplus for a merger or acquisition. Recently in 2015 Sun Pharma acquired Ranbaxy by utilising those reserves and surplus. 2. Return on Equity has remained constant since PAT and shareholders fund hasn’t changed 3.......

Words: 1727 - Pages: 7

Predicting Stock Market Using Regression Techniques-

...035 -.524 -.181 ICICIBANK .970 .169 -.021 -.057 IDFC .833 .426 .146 .279 INFOSYSTCH .981 -.017 .097 -.015 ITC -.063 .334 .777 .192 JINDALSTEL -.505 .546 -.313 -.222 JPASSOCIAT -.197 .913 .192 -.091 KOTAKBANK .148 .645 .617 .262 LT .884 .413 .016 .150 M& M .387 .592 .372 -.303 MARUTI .688 .563 .322 -.028 NTPC .004 .800 .384 .171 ONGC .074 .628 .114 .600 PNB .982 .032 -.001 .139 POWERGRID .189 .775 .271 -.144 RANBAXY .953 .022 .116 .057 RCOM -.546 .775 -.120 .135 RELCAPITAL .190 .926 .192 .173 RELIANCE -.600 .658 -.185 -.190 RELINFRA .105 .870 .292 .348 RPOWER .277 .833 .051 .363 SAIL .626 .474 .532 .192 SBIN .949 .126 -.113 .137 SESAGOA .748 .214 .595 .120 SIEMENS .966 -.035 .067 -.090 STER -.336 .561 .691 -.177 SUNPHARMA -.048 .417 .289 .725 TATAMOTORS .977 -.129 -.070 -.065 TATAPOWER .797 .482 .303 -.016 TATASTEEL .915 .218 .241 -.148 TCS .873 -.335 -.153 -.194 WIPRO .379 .413 .770 -.173 Extraction Method: Principal Component Analysis. Rotation Method: Varimax with Kaiser Normalization. a. Rotation converged in 9 iterations. From the above matrix we find that following companies constitute first Factor. ACC, AMBUJA, AXIS BANK, BAJAJ AUTO, BHEL, BPCL, CAIRN, CIPLA, DRREDDY, GAIL, Research Journal of Finance and Accounting www.iiste.org ISSN 2222-1697 (Paper) ISSN 2222-2847 (Online) Vol.6, No.3, 2015 31 HCLTECH, HDFCBANK, HINDALCO, HEROHONDA, HINDUNIVER, ICICIBANK, IDFS, INFOSYSTECH,LT, MARUTI, PNB, RANBAXY, SAIL, SBIN, SESAGOA,......

Words: 3557 - Pages: 15

Budget

...Laboratories Ltd PHARMACEUTICALS RANBAXY INE015A01028 Neutral Reliance Communications Ltd TELECOMMUNICATION- SERVICES RCOM INE330H01018 Neutral Reliance Industries Ltd REFINERIES RELIANCE INE002A01018 Neutral Reliance Infrastructure Ltd Infrastructure RELINFRA INE036A01016 Positive Reliance Power Ltd POWER RPOWER INE614G01033 Positive Sesa Goa Ltd MINING SESAGOA INE205A01025 Neutral Siemens Ltd ELECTRICAL EQUIPMENT SIEMENS INE003A01024 Positive State Bank of India BANKS SBIN INE062A01012 Neutral Steel Authority of India Ltd STEEL AND STEEL PRODUCTS SAIL INE114A01011 Positive Sterlite Industries (India) Ltd METALS STER INE268A01049 Neutral Sun Pharmaceutical Industries Ltd PHARMACEUTICALS SUNPHARMA INE044A01036 Neutral Tata Consultancy Services Ltd COMPUTERS - SOFTWARE TCS INE467B01029 Neutral Tata Motors Ltd AUTOMOBILES - 4 WHEELERS TATAMOTORS INE155A01022 Neutral Tata Power Co Ltd POWER TATAPOWER INE245A01021 Positive Tata Steel Ltd STEEL AND STEEL PRODUCTS TATASTEEL INE081A01012 Positive Wipro Ltd COMPUTERS - SOFTWARE WIPRO INE075A01022 Neutral...

Words: 7509 - Pages: 31

Business Plan

...Shareholders: From Tuesday, September 6, 2011 to Friday, September 16, 2011 (both days inclusive). 12.4 Dividend Payment Date : On or after September 20, 2011 12.5 (i) Listing of Equity Shares on Stock Exchanges : At The Bombay Stock Exchange Ltd., (BSE) and The National Stock Exchange of India Ltd. (NSE). Payment of Listing Fee: Listing Fees for the year ended 2011-12 have been paid to The Bombay Stock Exchange Ltd., and The National Stock Exchange of India Ltd, where the Company s Equity Shares continue to be listed. (ii) 12.6 Stock Code: Equity Shares (a) SUN PHARMA 524715 Trading Symbol National Stock Exchange (Demat Segment): (b) Trading Symbol The Bombay Stock Exchange Ltd., (Demat Segment): SUNPHARMA Demat ISIN Numbers in NSDL and CDSL for Equity Shares of ` 1/- each ISIN No. INE044A01036 Final - Resize Sun pharma 71-84.indd 8 16/08/2011 10:47:54 AM Annual Report 2010 -11 77 Corporate Governance 12.7 Stock Market Data Equity Shares: Bombay Stock Exchange Ltd. (BSE) (in `) National Stock Exchange of India Ltd. (NSE) (in `) Month s High Price Month s Low Price Month s High Price Month s Low Price 1,511.00* April 2010 1,846.00* 1,559.00* 1,853.00* May 2010 1,674.80* 1,515.10* 1,674.00* 1,516.00* June 2010 1,825.00* 1,644.40* 1,825.00* 1,651.30* July 2010 1,841.20* 1,692.50* 1,840.00* 1,697.30* August......

Words: 45525 - Pages: 183

Piramal Healthcare

...Scotia Citibank N.A. ICICI Bank Ltd Kotak Mahindra Bank Ltd Standard Chartered Bank State Bank of India Research centres Sun Pharma Advanced Research Centre (SPARC), Akota Road, Akota, Vadodara – 390 020, Gujarat, India. F.P.27, Part Survey No. 27, C.S. No. 1050, TPS No. 24, Village Tandalja, District Vadodara - 390 020, Gujarat, India. 17-B, Mahal Industrial Estate, Mahakali Caves Road, Andheri (East) Mumbai - 400 093, Maharashtra, India. * With partnership firm Sun Pharmaceutical Industries/Sun Pharma Sikkim. Registrars & Share Transfer Agents Link Intime India Pvt. Ltd. C/13, Kantilal Maganlal Estate, Pannalal Silk Mills Compound, L B S Marg, Bhandup (West), Mumbai – 400 078 Tel: (022)-25946970-78 Fax: (022)-25946969 E-mail: sunpharma@linkintime.co.in rnt.helpdesk@linkintime.co.in A PRODUCT info@trisyscom.com Annual Report 2009-10 Annexure (1) to Directors’ Report 2009-10 2008-09 CONSERVATION OF ENERGY A. Power and Fuel Consumption 1. Electricity (a) Purchased Unit (in ‘000 KWH) Total Amount (Rs. in Millions) Rate (Rs./Unit) (b) Own Generation through Diesel Generator Units (in ‘000 KWH) Units per Litre of Diesel Oil Cost (Rs./Unit) (c) Own Generation through Gas Units (in ‘000 KWH) Units per M3 of Gas Cost (Rs./Unit) 2. Furnace Oil Quantity (in ‘000 Litres) Total Amount (Rs. in Millions) Average Rate Gas (for Steam) Gas Units (in ‘000 M3) Total Amount (Rs. in Millions) Average Rate (Rs./Unit) Wood / Briquitte Quantity (in ‘000 Kgs) Total......

Words: 41744 - Pages: 167

Blindspot.S04E07.720p.WEB.H264-MEMENTO[TGx] | Watch Now | Anthony Russo