1. 1. Fundamental analysis of Sun Pharmaceutical Industries
2. 2. History and Background Founding members & When was it founded? Founder: Dilip Shanghvi Founded: 1983 Vision and mission statement Mission The mission of Sun India Pharmacy Ltd. is good health and happiness for all. We believe in utilizing modern science to bring out the essence of nature and provide effective and high quality medicines at affordable prices. Vision With the prime objective of good health to all, Sun India Pharmacy aims to be amongst the top ten Generic Pharma and OTC players in India in the span of next ten years. We intend to achieve this with the help of strategic growth and stringent quality measures.
3. 3. Milestones Timeline 1983 Sun Pharma begins operations in Kolkata with 5 psychiatry based products, first with 2 people and then with a 10 employee team. Year 1 turnover Rs. 1 million. 1988 With the launch of the brands Monotrate and Angizem, the first few cardiology products are launched. 1993 SPARC, the first research center, is inaugurated by His Excellency Shri K. R. Narayanan, the Vice President of India. An office is begun in Moscow. Products are now registered across 10 markets. 1996 Product registrations are now in place across 24 countries. 1997 It begin the first of its international acquisitions. As part of a technology forequity agreement, a stake is acquired in a generic dosage form manufacturer; the Detroitbased Caraco Pharm Labs. 1999 Rank moves within the top 10 in the domestic market. 2001 A new formulation plant is built in Dadra. 2002 Forbes Global ranks Sun Pharma in the list of best small 200 companies for 2002 (turnover less than $500 million). 2003 Forbes Global ranks Sun Pharma in the list of the best small 200 companies for 2003 (turnover less than $500million).
4. 4. 2004 Sun Pharma acquires common stock and options from 2 large shareholders of Caraco, increasing stake to over 60% from 44% at a total outlay of about $42 million. By 2007, this stake has reached 75% on a diluted basis. 2005 Sun Pharma buys a plant in Bryan, Ohio, US and the business of ICN, Hungary from Valeant Pharma 2006 Announced the demerger of innovative business with pipelines, people, equipment and funding, into a new company. 2007 Completed the demerger of the innovative business, with requisite legal and regulatory approvals. SPARC ltd, the new company, is listed on the stock exchanges in India, the first pure research company to be so listed 2008 In November 2008, it along with its subsidiaries, acquired 100% ownership of Chattem Chemicals, Inc.,a narcotic raw material importer and manufacturer of controlled substances with a approved facility in Tennessee. 2011 Dilip Shanghvi, CMD, received the E&Y Entrepreneur of the Year Award for 2010. 2014 April 6, 2014 Sun Pharmaceutical Industries and Ranbaxy Laboratories announced that they have entered into definitive agreements pursuant to which Sun Pharma will acquire 100% of Ranbaxy in an allstock transaction
5. 5. Promoters Management and Personnel No. Name of the Shareholder Number As a % of grand total 1 Dilip Shantilal Shanghvi 231,140,480 11.16 2 Viditi Investment Pvt Ltd 201,385,320 9.72 3 Tejaskiran Pharmachem Industries Pvt Ltd 195,343,760 9.43 4 Family Investment Pvt Ltd 182,927,440 8.83 5 Quality Investment Pvt Ltd 182,868,640 8.83 6 Virtuous Finance Pvt Ltd 97,104,040 4.69 7 Virtuous Share Investments Pvt Ltd 83,976,000 4.05 8 Sholapur Organics Pvt Ltd 16,035,080 0.77 9 Jayant Shantilal Sanghvi 7,416,840 0.36 10 Vibha Dilip Shanghvi 5,784,000 0.28 11 Kumud Shantilal Shanghvi 3,280,000 0.16 12 Aalok Dilip Shanghvi 2,885,000 0.14 13 Vidhi Dilip Shanghvi 2,830,000 0.14
6. 6. Promoters 14 Jeevanrekha Investrade Pvt Ltd 1,462,720 0.07 15 Kumud S Shanghvi Trustee of Shanghvi Family & Friends Benefit Trust 1,280,200 0.06 16 Package Investrade Pvt Ltd 897,440 0.04 17 Varsha Kiran Doshi 322,000 0.02 18 Shanghvi Finance Pvt Ltd 283,360 0.01 19 Dipti Nirmal Modi 227,880 0.01 20 Asawari Investment & Finance Pvt Ltd 49,600 0 21 Flamboyawer Finance Pvt Ltd 20,920 0 22 Sanghvi Properties Pvt Ltd 15,520 0 23 Gujarat Sun Pharmaceutical Industries Pvt Ltd 14,400 0 24 Nirmit Exports Pvt Ltd 7,040 0 25 Raksha Sudhir Valia 34,772,000 1.68 26 Sudhir Vrundavandas Valia 15,384,000 0.74 27 Aditya Medisales Ltd 40,203,960 1.94 28 Unimed Investments Ltd 10,428,760 0.5 Total 1,318,346,400 63.65
7. 7. Management and Personnel Name Designation Name Designation Israel Makov Chairman Dilip S Shanghvi Managing Director Sudhir V Valia Whole Time Director Sailesh T Desai Whole Time Director S Mohanchand Dadha Director Hasmukh S Shah Director Keki M Mistry Director Ashwin Dani Director Rekha Sethi Director
8. 8. Company Analysis Current product and service mix of Sun Pharma Provide wide range of Ayurvedic and Allopathic product. Provide high quality medicines at the most affordable prices. Product AYURVEDIC PRODUCTS TABLETS JAR SOFTGEL CAPSULES CAPSULES TABLETS SYRUPS
9. 9. Company Analysis USP Bringing Healthcare at affordable prices for India masses Advertising and Marketing Strategy For a company that started in 1983 with just five people and five products, it's no mean achievement that Sun Pharma today commands the largest market capitalization of Rs 21,271 crore (Rs 212.71 billion) in the pharma universe. Sun Pharma focuses on niche segments such as psychiatry and lifestyle drugs, the company has raced ahead, with its business growing four-fold between 1999-2000 and now, with revenues of Rs 2,237 crore (Rs 22.37 billion). From the very beginning sun pharma has focused on the high-margin chronic care therapy products that have made the company very profitable. Building a profitable business or creating wealth for his shareholders. Today, with a domestic market share of 3.2 per cent, it is ranked number six.
10. 10. Geographical Reach AFRICA ASIA PACIFIC EUROPE NORTH AMERICA Morocco Australia France Canada Nigeria Malaysia Germany USA South Africa Myanmar Ireland SOUTH AMERICA Sri Lanka Italy Brazil Lithuania CIS The Netherlands Russia Poland Ukraine Romania Spain United Kingdom Denmark Finland Norway Sweden
11. 11. Geographical Reach
12. 12. Industry Analysis Industry wide growth parameters Increase in life expectancy and ageing population: Life expectancy is expected to reach 73.7 years by 2017 from an estimated 72.6 years in 2012, bringing more than 10% of the total global population to over the age of 65 years. Rising income of households: Rising income will make growth of the pharmaceuticals industry grow. Growing incidence of chronic diseases: Healthcare demand for diseases will contribute to the industrys growth. Improved healthcare access reforms: With more than one billion people lacking access to a health care system across reforms, including increases in government funding and broader insurance coverage.
13. 13. Industry Analysis Market Share Total Sales Turnover of PHARMACEUTICALS industry: 126098.11 in Cr Sales turnover: 8017.2 in Cr Net total percentage of turnover: 6.3579 TOTAL SALES TURNOVER OF PHARMACUTICAL INDUSTRY SALES TURNOVER OF SUN PHARMA 0 20000 40000 60000 80000 100000 120000 140000
14. 14. PEER COMPARISION Name Last Price Market Cap. (Rs. cr.) Sales Turnover Net Profit Total Assets Sun Pharma 843.9 203078.07 8017.2 -1472.76 9816.89 Lupin 1731.7 77897.91 9752.47 2397.35 7118.44 Dr Reddys Labs 3347.2 57067.77 10010.94 1679.35 11993.5 Cipla 612.9 49213.45 10131.78 1181.09 10968.98 Aurobindo Pharm 1335.3 38988.39 8095.1 1516.34 6827.25 Cadila Health 1793.7 36725.74 5284.43 1271.12 5041.1
15. 15. Regulation CDSCO Central Drugs Standard Control Organization (CDSCO), Ministry of Health & Family Welfare, Government of India provides general information about drug regulatory requirements in India. NPPA The clinical trials legislative requirements are guided by specifications of Schedule Yof The D&C Act. D & C Act, 1940 The clinical trials legislative requirements are guided by specifications of Schedule Yof The D&C Act. Schedule M The clinical trials legislative requirements are guided by specifications of Schedule Yof The D&C Act. Schedule T The clinical trials legislative requirements are guided by specifications of Schedule Yof The D&C Act. Schedule Y The clinical trials legislative requirements are guided by specifications of Schedule Yof The D&C Act.
16. 16. Regulation GCP guidelines The Ministry of Health, along with Drugs Controller General of India (DCGI) and Indian Council for Medical Research (ICMR)has come out with draft guidelines for research in human subjects. These GCP guidelines are essentially based on Declaration of Helsinki, WHO guidelines and ICH requirements for good clinical practice. The Pharmacy Act,1948 The Pharmacy Act, 1948 is meant to regulate the profession of Pharmacy in India. The Drugs and Magic Remedies (Objectionable Ad vertisement) Act, 1954 The Drugs and Magic Remedies (Objectionable Advertisement) Act, 1954 provides to control the advertisements regarding drugs; it prohibits the advertising of remedies alleged to possess magic qualities. The Narcotic Drugs and Psychotropic Substances Act, 1985 The Narcotic Drugs and Psychotropic Substances Act, 1985 is an act concerned with control and regulation of operations relating to Narcotic Drugs and Psychotropic Substances.
17. 17. Future Prospectus & Recommendation Growth Prospectus The Rs 1,400-crore (Rs 14 billion) Sun Pharmaceuticals has made substantial investments in R&D over the past five to six years, the corporate decision to convert this intellectual asset into a future growth-driver by demerging the innovative research arm come only now. Sun Pharmaceutical Industries, Indias largest drugmaker, announced the closure of its merger with Ranbaxy Laboratories and said the integration would deliver synergies worth $250 million (about Rs 1,500 crore) in three years. Suns superior marketing and distribution franchise in the US should help it scale up revenues from Ranbaxys generic product basket. Sun can leverage its expertise in the derma market (through its subsidiary Taro Pharma) to boost revenues from Ranbaxys acne drug Absorica Suns management expects the Ranbaxy merger to add $250 million to its operating profit over one-two years. The Ranbaxy merger will strengthen Suns position in emerging markets in the Asia-Pacific, Latin America, Africa and West Asia.
18. 18. 4 quarter performance snapshot Period Ending: Mar'15 Dec'14 Sept'14 Jun'14 Total Revenue 61570.5 69294.6 143469.3 39355.8 Gross Profit 45596.1 52167.6 109179 31707.4 Operating Income 3304.6 19361.3 42644.7 16045.9 Net Income 8880.5 3953.3 32572.2 13905.1 Mar'15 Dec'14 Sept'14 Jun'14 0 20000 40000 60000 80000 100000 120000 140000 160000 Total Revenue Gross Profit Operating Income Net Income
19. 19. Recommendations MARKET CAP of Sun Pharma (RS CR)204,545.98 SECTOR: PHARMACEUTICALS Return on Investment TTM 21.05% (TTM = Trailing Twelve Months) Last 3 month high on NSE:1,200.80 Last 3 month low on NSE: 807.25 Today (18 jun) open on NSE : 847.00 In next slide past three month data shows the downward trend `from my point of it's good opportunity for investor to invest stock because of high earning visibility in pharmaceutical sector.
20. 20. Recommendations Past three Month Data 0 2 0 0 4 0 0 6 0 0 8 0 0 1 0 0 0 1 2 0 0 1 4 0 0 3 / 1 8 / 2 0 1 5 4 / 1 8 / 2 0 1 5 5 / 1 8 / 2 0 1 5 H i g h L o w
21. 21. Reasons Pharma stocks have moved up sharply in the last one year. Pharma companies were riding on the back of rupee depreciation and a recovery in the US market, while investors have found safety in the pharmaceuticals sector due to its reputation as a 'safe haven' against high inflation and interest rates.
22. 22. Thank you..