Fundamental and Technical Analysis of Sun Pharmaceuticals

Fundamental and Technical Analysis of Sun Pharmaceuticals2014Shardul Chimoteitm-khr

Fundamental and Technical Analysis of Sun PharmaceuticalsAbout Sun Pharmaceuticals

Sun Pharmaceutical Industries Limited(NSE:SUNPHARMA,BSE:524715) is an multinationalpharmaceuticalcompany headquartered in Mumbai, Maharashtrathat 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 ascardiology,psychiatry,neurology,gastroenterologyanddiabetology. It also provides APIs such as warfarin, carbamazepine, etodolac, and clorazepate, as well as anticancers, steroids, peptides, sex hormones, and controlled substances.Sun Pharmaceuticals was established by Mr.Dilip Shanghviin 1983 inKolkatawith five products to treatpsychiatryailments. Cardiology products were introduced in 1987 followed bygastroenterologyproducts in 1989. Today it is the largest chronic prescription company in India and a market leader inpsychiatry, neurology, cardiology,orthopedics,ophthalmology, gastroenterology andnephrology. Some of the top brands of the company include pantocid, susten, aztor, gemer, repace, glucored, strocit, clopilet and cardivas. Over 57% of Sun Pharma sales are from markets outside India, primarily in the US. Manufacturing is across 23 locations, including the US, Canada, Brazil, Mexico and Israel. In the US, the company markets over 200 generics, with another 150 awaiting approval from the U.S.Food and Drug Administration(FDA).Sun Pharma was listed on the stock exchange in 1994 in an issue oversubscribed 55 times. The founding family continues to hold a majority stake in the company. Today Sun Pharma is the third largest and the most profitable pharmaceutical company in India as well as the largest pharmaceutical company by market capitalisation on the Indian exchanges.The Indian pharmaceutical industry has become the third largest producer in the world in terms of volumes and is poised to grow into an industry of $20 billion in 2015 from the current turnover of $12 billion.In terms of value India still stands at number 14 in the world.

Share holding pattern

Share holding pattern as on :31/12/201330/09/201316/08/2013

Face value111

No. Of Shares% HoldingNo. Of Shares% HoldingNo. Of Shares% Holding

Promoter's holding

Indian Promoters131834140063.65131834140063.65131834140063.65

Sub total131834140063.65131834140063.65131834140063.65

Non promoter's holding

Institutional investors

Banks Fin. Inst. and Insurance922563604.45397673271.92362405531.75

FII's46589915222.4947178286322.7847413153522.89

Sub total58387359928.1953696729425.9353720678425.94

Other investors

Private Corporate Bodies510872692.471004724324.851007619654.86

NRI's/OCB's/Foreign Others30335140.1529382470.1429807030.14

Direcctors/Employees48698500.2448698500.2448698500.24

Govt8925120.045259710.034854960.02

Others25115110.1229290470.1420794670.1

Sub total623946563.011117355475.391111774815.37

General public1065542555.141040896695.031044066455.04

Grand total207116391010020711339101002071132310100

Interpretation from above data:-1. Promoter holding, as seen is at 63.65%, which is greater than 50%. Hence the company is stable.2. It is also evident from the above data that the chances of Sun Pharma being acquired by other company is very less as the promoter holding stands at 63.65%.

The following graph gives the share of promoter, non promoter and other investors in share holding pattern.

Mutual Fund holdings

Interpretation from above data:-As seen from above graph mutual fund holding is quite stable, hence the mutual fund is bullish about this company.

Public Share Holdings

No.Name of the ShareholderTotal Shares heldShares as % of Total No. of Shares

1Genesis Indian Investment Company Ltd General Sub Fund49,027,4652.37

2Lakshdeep Investments & Finance Pvt Ltd22,226,0001.07

3Life Insurance Corporation of India21,264,4291.03

Total92,517,8944.47

The average public share holding is greater than 1 %.

Industry Analysis

SWOT Analysis for pharmaceuticals sector in India

Fundamental Analysis of Sun Pharma

Beta0.539

Confidence in Beta1.08%

Diluted Trailing Twelve Months (TTM) Earnings Per Share (EPS)Rs.12.42

TTM Price-to-Earnings (P/E) Ratio49.3

Relative Strength Index

According to relative strength index, Sun pharma is at its support.

Sun pharma simple moving average

Sun pharma exponential moving average

Moving average convergence and divergence

Sun pharma Bollinger bands

Financial Ratios

Mar '13Mar '12Mar '11Mar '10Mar '09

Investment Valuation Ratios

Face Value1.001.001.005.005.00

Dividend Per Share----------

Operating Profit Per Share (Rs)47.2830.9419.0456.5590.02

Net Operating Profit Per Share (Rs)109.1277.4455.25188.46206.62

Free Reserves Per Share (Rs)----87.66356.10306.91

Bonus in Equity Capital78.0378.0378.0378.0378.03

Profitability Ratios

Operating Profit Margin(%)43.3339.9534.2730.0043.56

Profit Before Interest And Tax Margin(%)39.0134.3028.9023.8338.97

Gross Profit Margin(%)40.3536.3230.6926.0740.68

Cash Profit Margin(%)37.6039.2734.7734.2744.21

Adjusted Cash Margin(%)37.6039.2734.0234.2744.21

Net Profit Margin(%)25.5231.2830.4331.6440.69

Adjusted Net Profit Margin(%)25.5231.2829.8531.6440.69

Return On Capital Employed(%)32.5727.0721.4517.3026.69

Return On Net Worth(%)19.9021.7119.1517.2525.80

Adjusted Return on Net Worth(%)27.0824.8719.2516.7326.28

Return on Assets Excluding Revaluations144.75118.1591.57378.00340.14

Return on Assets Including Revaluations144.75118.1591.57378.00340.14

Return on Long Term Funds(%)32.7527.3120.7717.5727.29

Liquidity And Solvency Ratios

Current Ratio2.913.323.333.554.30

Quick Ratio2.162.562.913.003.91

Debt Equity Ratio0.010.020.040.020.03

Long Term Debt Equity Ratio0.010.010.020.01--

Debt Coverage Ratios

Interest Cover114.65120.0228.60225.07329.67

Total Debt to Owners Fund0.010.020.040.020.03

Financial Charges Coverage Ratio122.44130.3538.39250.00350.75

Financial Charges Coverage Ratio Post Tax77.91105.5335.99245.62332.80

Management Efficiency Ratios

Inventory Turnover Ratio4.383.843.854.004.79

Debtors Turnover Ratio4.874.974.933.803.72

Investments Turnover Ratio4.383.844.374.004.79

Fixed Assets Turnover Ratio2.021.721.461.872.24

Total Assets Turnover Ratio0.790.650.590.510.62

Asset Turnover Ratio0.740.660.601.872.24

Average Raw Material Holding----172.34204.47195.22

Average Finished Goods Held----40.9023.8624.40

Number of Days In Working Capital239.40296.45312.02280.68304.22

Profit & Loss Account Ratios

Material Cost Composition22.8628.3125.9630.3523.41

Imported Composition of Raw Materials Consumed----------

Selling Distribution Cost Composition----8.287.997.43

Expenses as Composition of Total Sales----------

Cash Flow Indicator Ratios

Dividend Payout Ratio Net Profit20.3019.2523.1924.5718.33

Dividend Payout Ratio Cash Profit18.2517.3520.8522.0717.16

Earning Retention Ratio85.0883.2076.9474.6682.01

Cash Earning Retention Ratio86.2284.6679.2677.3183.13

AdjustedCash Flow Times0.050.080.210.120.09

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