JULY 2020

SUN
PHARMACEUTICAL
INDUSTRIES LTD.
H*

PREPARED BY:
Nithin J Ukken
 OVERVIEW OF SUN
PHARMA
Sun Pharmaceutical Industries Limited is a pharmaceuticals
company which offers generics, branded generics, specialty
products, over-the-counter products, anti-retroviral and APIs. It is
the largest pharmaceutical company in terms of market
capitalization and have presence over 150 countries worldwide.
The company is present in various therapeutic areas such as
cardiology, psychiatry, neurology, gastroenterology and
diabetology. The company has a separate research wing known as
Sun pharma Advance company ltd. (SPAC) which is the first fully
fledged research company to be listed in both NSE and BSE. The
company has also made a lot of strategic acquisitions over the
years.

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 Shareholding
Pattern

Shangvi finance (holds 40%) which is the promoter group of the

company has raised their stake in the company in March 2020
quarter. Out of the 54.68% of the promoter holdings, 7.22% is pledged.
There has been a considerable increase in the holdings from both
mutual funds and DIIs in the March 2020 quarter which shows a
positive outlook for the company.

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 MANAGEMENT

Mr. Dilip S. Shanghvi, Managing Director and Mr. Sudhir V. Valia, Wholetime
Director of the Company retire by rotation and being eligible offer themselves
for reappointment at the ensuing 26th Annual General Meeting of the
Company

The re-appointment of Mr. Sudhir V. Valia and Mr. Sailesh T. Desai for a further
period of 5 (Five) years from April 01, 2019 to March 31, 2024, and remuneration
for a period of 3 (Three) years from April 01, 2019 to March 31, 2022 due to
inadequacy of profits, for approval of the members at the ensuing 26th Annual
General Meeting of the Company.

The re-appointment of Mr. Kalyanasundaram Subramanian for a further period

of 2 (Two) years from February 14, 2019 to February 13, 2021, without any
remuneration, for approval of the members at the ensuing 26th Annual General
Meeting of the Company.

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SWOT Analysis

PAGE 04
Strengths

1. Strong growth in emerging market business Sun Pharma expanded its

footprint in Russia which aims to increase local production of generics through
the acquisition of Russian drug maker Biosintez. Ranbaxy entered the Russian
market in 1993 and had an established market presence in the country. Hence
Sun Pharma's Russia business has expanded after acquisition of Ranbaxy in
2014.
2. Continuous increase in ANDA (Abbreviated New Drug Application)
approvals
3. Strong brand presence in Indian branded generics market and it is
the market leader in branded specialty chronic segments in India.
4. Largest generic dermatology company and 3rd largest branded dermatology
company in the US and has a strong growth potential in US market in the
coming years especially after the COVID 19 situation.

Weakness
1. Under performing Subsidiaries Shares of Sun Pharma fell over 5 per
cent after its subsidiary Taro Pharmaceutical Industries reported
disappointing numbers for the June quarter.
2. Recent NPPA decision- The country's drug price regulator has
reduced the prices of eight medicines sold by leading pharma
companies such as Sun Pharma and Unichem by up to 85 %, in one of
the sharpest price-cuts in the last few years. The prices of Sun Pharma
and Unichem's combination blood pressure medicines ‘ Spironolactone
+Torsemide ' have been halved and will now cost Rs 21 and 24 for 10-
tablet strips respectively.
3. Regulatory issues in manufacturing process-The US drug regulator,
the Food and Drug Administration (FDA) says it found seven breaches
of manufacturing standards at Sun Pharma's formulations unit at Mohali,
in a recent inspection.

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Opportunities

1. Sun Pharma looks to grab major share of oncology market with

Gemcitabine InfuSMART.
2. Sun pharma enters dermatology segment to expand retail offering.
Sunscreen brand earlier available only as a branded prescribtion product.
Now has an 18% market share and looking at a 30% market share in 2-3
years.
3. Sun Pharma to outsource manufacturing of its psoriasis drug to
Samsung BioLogics. Entered into a strategic agreement with Samsung
BioLogics to manufacture the former’s psoriasis drug Tildrakizumab.
4. Sun Pharma looking to leverage Ranbaxy OTC drugs to expand its
Global presence. Sun Pharma had no presence in the high-volumes OTC
segment. Recently rolled out its first OTC drug, antacid Pepmelt, that will
compete with Eno, Digene and Pudin Hara

Threats

1. Growing competition in generic market- There is a stiff competition in generic

market from other low cost rivals like Lupin, Dr. Reddy’s, Cipla which affects
growth of market share of Sun pharma. The generic drug companies in India have
broad technological and diversified market capabilities. As more and more patents
expire, the generic portion of the pharmaceutical market is expected to continue
to have increased sales
2. Sun pharma being an exporter of pharmaceutical products, its profitability could
decline because of adverse currency movements.
3. New pricing policies in India can have negative impact on the
industry. Changes in such policies may affect profitability of Sun pharma.

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 PeerPeer Analysis
Analysis

Sun pharma is the largest company in terms of market capitalization and total
assets. But Dr Reddy's has provided better return to its investors over the last
year compared to Sun pharma and Cipla. The stock is less volatile compared to
aurobindo pharma but it is a bit pricey compared to Dr. Reddy's. The PE ratio of
the stock is 30 which is much above that of DR. Reddy's(21) and Aurobindo
pharma (16). The company has a better net profit ratio compared to other
pharma companies.
Market Share
Sun pharma=15%
Dr. Reddy - 6%
cipla - 8%

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CONCLUSION

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