Finlatics Project

INTERNSHIP PROJECT REPORT
“INDIAN PHARMA AND AGRO CHEMICAL SECTOR – BULL OR

BEAR!!!”
A report submitted in partial fulfillment of the requirements for the award of

Diploma of
POST GRADUATE IN MANAGEMENT
In
INTERNATIONAL BUSINESS
BY
RAMAN SINGHAL
PGDM IB-21IB325
UNDER THE SUPERVISION OF

DR. L. RAMANI
PROFESSOR (FINANCE),
(Duration: 02nd May, 2022 to 06th July, 2022)
BIRLA INSTITUTE OF MANAGEMENT AND TECHNOLOGY, GREATER NOIDA

Approved by AICTE, Accredited by NBA (AICTE) & NAAC (UGC)
Plot Number 5, Knowledge Park 2, NCR, Greater Noida, Uttar Pradesh- 201306
1
LETTER OF TRANSMITTAL
Mr. Nisant Mohta (Fincrux Technologies)

903, Atrium 2,
Andheri-kurla road,
Andheri east, Mumbai
Maharashtra-400093
Dear Sir,
Re: Summer Project Report
Attached herewith is a copy of my summer-project report “INDIAN PHARMA AND AGRO

CHEMICAL SECTOR – BULL OR BEAR!!!” which I am submitting in order to mark the completion
of my summer project at your organization. This report was prepared by me using the best of
practices and summarizes the work performed on the project and is being submitted in partial
fulfilment of the requirements for award of diploma.
I would like to mention that the overall experience with the organization was very good, and helped
me to know how work is carried out in real practice with the help of your esteemed organization. I
feel honoured that I got an opportunity to work with Fincrux technologies, a company of great
repute.
I hope I did justice to the project and added some value to the organization.
Your suggestions/comments would be appreciated.
Yours truly,
Raman Singhal
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ACKNOWLEDGEMENT
The efforts that have gone in to the project have proved to be of immense value and has left
me far richer , not only in knowledge of the subject but also of the subject but also of
various other disciplines and system that l have come across in the course of my project.
I would like to express my sincere thanks and gratitude to Dr. L. Ramani, professor and
chairperson at Bimtech, Greater Noida for his excellent guidance and support throughout
this project work.
I would like to express my sincere thanks to Mr. Nisant Mohta, Founder, for proving me
with this opportunity and my project external guide Mr. Avni Shetty and Mr. Rohan Pathare
of Finlatics for providing me constant support, guidance and cooperation during this study
period.
l wish to place on record my deep sense of gratitude to Dr. Rajeev Sharma (Professor and
CCR Head, Bimtech) and Dr. Anuj Sharma(Professor and Course coordinator of IB, Bimtech)
who have provided us the opportunity to interact with the industry to increase our
experiential learning during the course time.
l am sure that the experience l have gained during the completion of this project will prove
to be beneficial in the process of attainment of my educational and career goals.
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FACULTY MENTOR CERTIFICATE
This is to certify that the project report entitled “Indian Pharma and Agro chemical sector –
Bull or Bear!!!” submitted by Mr. Raman Singhal bearing Roll no. 21IB325 of PGDM-IB
2021-23 batch to Birla institute of management and technology for the partial fulfilment of
Post graduate diploma in management, International business is an outcome of genuine
research work carried under my guidance and it has not been submitted for the reward of
any other degree, diploma or certificate.
Date:
Place: Greater Noida
Signature:
Dr. L. Ramani
(Professor)
4
DECLERATION
I hereby declare that this project entitled “Indian Pharma and Agro chemical sector – Bull
or Bear!!!” was prepared by me during the year 2022 and was submitted in partial
fulfilment of the requirements for Post graduate diploma in management of Birla institute
of management and technology.
I also hereby declare that this project is original and genuine and has not been submitted to
any other university of the award of any degree, diploma or other similar titles or purposes.
My learning experiencing at Finlatics under the guidance of Mr. Nisant Mohta, founder, Mr.
Rohan Pathare, Mr. Avni shetty and Dr, L. Ramani, Professor, has been truly enriching.
Date:
Place: Greater Noida
Signature:
Raman Singhal
21IB325
PGDM – International Business (Bimtech)
TABLE OF CONTENTS
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S. No. Particulars Page No.
Executive Summary 7-8
1. Introduction 9-11
1.1 Company Overview 9

1.2 Product portfolio 9
1.3 Industry Overview 10-11
2. Objective and Scope of the study 12-13
2.1 Statement of study 12
2.2 Methodology and Scope 12

2.3 Objective of the study 12-13
3. Pharmaceutical and Agro Chemical Stocks Fundamental analysis 13-70
and Valuation
3.1 Indian economy outlook 13-14
3.2 Industry Outlook 14-16
3.2.1 Pharmaceutical Industry 14-15
3.2.2 Agro Chemical Industry 15-16
3.3 Pharmaceutical stocks 17-44
3.3.1 Sun Pharma 17-30

3.3.2 Granules India 31-44
3.4 Agro Chemical stocks 44-70
3.4.1 PI Industries 44-57
3.4.2 Dhanuka Agritech 57-70
4. Conclusion 70
5. References 71
EXECUTIVE SUMMARY
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India is a growing story, India’s nominal gross domestic product (GDP) at current prices is
estimated to be at Rs. 232.15 trillion (US$ 3.12 trillion) in FY22. India's exports of goods reached a
record high of US$417.81 billion in FY22. In April 2022, the Manufacturing Purchasing Managers'
Index (PMI) in India stood at 54.7. One of the India’s most growing sector is Pharma, Indian Pharma
Industry ranks third in terms of volume and fourteenth in terms of value. Pharma makes for
roughly 2% of India's GDP and about 8% of its exports of goods. It has more than 10500
manufacturing facilities and a network of 3000 pharmaceutical companies. Indian pharmaceutical
exports have increased by 103% from 2013–14. In eight years, it has increased by over $10 billion
USD. In the following ten years, it is anticipated that the domestic market will increase by three
times. The market is currently worth US$42 billion and is expected to grow to US$120–130 billion.
Another sector that has been showing constant growth is agro chemical, India ranks fourth in the
world for agrochemical production. India ranks 14th in exports, which is a strong position. The
Indian agrochemicals industry was valued at around INR 42,000 crore in FY2020 out of which
domestic consumption was worth around INR 20,000 crore, while exports during the same period
were worth around INR 22,000 crore. The industry is expected to grow at a CAGR of 8–10% till
2025. Therefore two sectors have been chosen to study. Then 2 stocks each has been chosen from
each sector to calculate its valuation according to the DCF valuation method for the companies Sun
pharma, Granules India, PI industries and Dhanuka agritech. To value the particular stocks of the
sector, financials were predicted by taking certain assumptions and free cash flows to the business
were discounted at the weighted average cost of capital, the firm's value is the total of the
discounted value of such free cash flows. It delivers a close, intrinsic stock value as well as the
ability to precisely predict a company's future. In order to calculate FCFF we used the formula:
(EBIT(1-TAX) +DEPRECIATION-CAPEX-CHANGE IN WORKING CAPITAL)
Which demonstrates the company's current enterprise value, implying that the cash flow is
available to all funding providers (debt holders, preferred stockholders, common stockholders,
convertible bond investors, etc.).
So, using the values from 2022, we get NOPAT, which is equal to EBIT less cash taxes. Depreciation
and amortisation, which are non-cash expenses, were then added to NOPAT. Then we deduct any
changes to CAPEX. Finally, we deduct all changes in net working capital. We used the following
formula to calculate FCFE:
FCFF-INTEREST(1-TAX)+NET BORROWING
So, using the numbers from 2022, we came to know that free cash flow from equity i.e. the cash
available for equity shareholders.
After that WACC is calculated which represents the cost of raising one additional rupee.
WACC is an essential factor in business valuation in loan applications and operational evaluation.
Companies look for strategies to reduce their WACC by utilising less expensive sources of funding.
WACC was calculated using the following formula:
WACC = (E/V x Re) + ((D/V x Rd) x (1 – T))
We have considered cash flows in the forecast period. However, we would expect the business to
run perpetually in general. So we needed to take into account the cash flows beyond the terminal
year as well.
Terminal value is the value of a business or project beyond the forecast period. Terminal value
assumes a business will grow at a set growth rate forever after the forecast period. Terminal value
often comprises a large percentage of the total assessed value.
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PV = CF at terminal year x (1 + terminal growth rate) / (discount rate – terminal growth rate)
Now that we have the present values of both the projection period cash flows and the terminal
value, we computed the enterprise value by adding these present values together. And then
dividing total no. of shares to derive Projected Equity share price. This process was carried onto
each stock to get the price of the stock.
The primary objective of the project was to analyse the quantitative aspect of the selected
companies. And to provide investors with detailed financial analysis and recommendations on
whether to buy, hold or sell particular investment. Therefore recommendation has been provided
to the investor after analyzing the company’s stock valuations as per PE valuations. Following are
the recommendations for the stocks chosen:
Sun Pharma: Hold
Granules India: Buy
PI Industries: Buy
Dhanuka Agritech: Buy
In Sun pharma, stock price on 04th July 2022 was Rs. 829 which is valued at 90.61 PE multiples
whereas the equity valuation at 20.78 PE multiple is Rs. 190 and considering the growth till 2025 at
current PE multiples i.e. 90.61, the stock price would be Rs. 1250 which is expensive. Therefore a
hold call has been given to the stock. In Granules India, stock price on 04 th July 2022 was Rs. 279
which is valued at 15.40 PE multiples whereas the equity valuation at 23.55 PE multiple is Rs. 426
and considering the growth till 2025 at current PE multiples i.e. 15.40, the stock price would be Rs.
558.66 which is cheap compared to its growth rate. Therefore a buy call has been given to the stock.
In PI Industries, stock price on 04 th July 2022 was Rs. 2651 which is valued at 45.86 PE multiples
whereas the equity valuation at 15.72 PE multiple is Rs. 908 and considering the growth till 2025 at
current PE multiples i.e. 45.86, the stock price would be Rs. 4420 which is cheap compared to its
growth rate. Therefore a buy call has been given to the stock. In Dhanuka agritech, stock price on
04th July 2022 was Rs. 688 which is valued at 14.99 PE multiples whereas the equity valuation at
27.54 PE multiple is Rs. 1265 and considering the growth till 2025 at current PE multiples i.e.
14.99, the stock price would be Rs. 1133 which is not expensive. Therefore a buy call has been given
to the stock.
1. Introduction
1.1 Company Overview
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Finlatics (Fincrux Technologies) is an Edu-Tech company providing online certification and skill
development services. Finlatics was started in July 2017 with the aim of making finance and equity
markets more accessible, friendly, and fun. It was conceptualized and launched as a foremost work
experience platform that helps students experience domains like financial markets, portfolio
management, equity research, investment banking, private equity, venture capital among others as
a highway to their careers in finance. The founder, Nisant Mohta observed several peers seeking
opportunities beyond university courses to enhance their profiles and relevant work experience to
stand out to potential employers where the core objective of the Finlatics is to provide learners an
opportunity to gain hands on work experience via programs.
Due to the career acceleration nature of the platform and the impact it can have on lives, Finlatics
was one of the companies selected for incubation at the prestigious Atal Incubation Centre –
NMIMS, supported by Atal Innovation Mission, NITI Aayog & Government of India. Company is also
a recognized ‘Start – Up’ by Department for Promotion of Industry & Internal Trade, Government of
India.
1.2 Product portfolio

Finlatics currently offers two flagship programs – the Financial Markets Experience Program
(FMEP) that helps students gain experience in Indian equity markets and the Investment Banking
Experience Program (IBEP) for those wanting to get a head start in the world of private equity and
venture capital.
Financial Markets Experience Program (FMEP) is a two month equity trading, research, and
analysis based program in which user is able to Create, manage and maintain a real-time simulated
portfolio on BSE 500 listed companies.
The Investment Banking Experience Program (IBEP), a hybrid between finance and management
consulting, aims to help students understand how to assess investment proposals and deepen their
understanding of private equity (PE) right from the set-up of a PE fund to the various stages of PE
investing.
1.3 Industry Overview
As e-learning continues to grow more popular, its scope is widening worldwide due to pandemic
led restrictions. As a result, India’s own education technology (Edtech) sector is expected by
industry analysts to become a US$30 billion industry over the next decade. Recently in June 2022,
Noida-based Edtech platform PhysicsWallah, also known as PW, became the seventh Edtech to
enter the unicorn club, as it raised US$100 million in a Series A funding round from Westbridge and
GSV Ventures. Other unicorns in the Edtech sector are Byju’s, Eruditus, Unacademy, Lead, Upgrad,
and Vedantu.
According to Statista estimates, the present market valuation of the Indian Edtech industry is
US$750 million and is expected to reach US$4 billion by 2025. At present, there are 9,043 EdTech
startups in India. This trend is further augmented by factors like India’s burgeoning internet
economy – which recorded a total number of 743.19 million internet subscribers (as of March
2020). In 2020, there were approximately 700 million smartphone users in India.
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Educational Technology Market Size in India (in US$ Billion)
Segment 2020 2025 (Projection)
K-12 US$320 million US$1.72 billion
Test preparation US$210 million US$1.51 billion
Online certification US$152 million US$552 million
Skill development US$69 million US$292 million
Total US$750 million US$4 billion
Source www.ibef.com
Source www.ibef.com
Categories of the digital learning market in India and major players
The digital learning market in India is categorized into following segments: K-12, test preparation,
online certification, skill development, and enterprise solution. The major growth drivers of these
segments include a large addressable market, convenience, price advantage, as well as pandemic-
led disruptions, aided with ever evolving technology capabilities.
K-12: With the current enrolment of more than 250 million, the K-12 segment is the largest and
most attractive segment for digital learning providers in India. In this segment of e-learning, further
sub-segments include smart class solutions, online tutoring, online preparation for exams,
simulation and virtual reality, STEM learning, AR and robotics, and assessment. Prominent Indian
players in this segment are Cuemath, STEPapp, Whitehat Jr, and CampK12.
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Test preparation: It is another emerging Edtech segment that has continued to evolve in the past
few years, with a larger number of users relying on these platforms to prepare for competitive
exams like JEE, NEET, CAT, IAS, GRE, and GMAT. This is mainly due to the convenience and cost
effectiveness of these platforms. Training institutions, such as Career Launcher and T.I.M.E, and top
B-schools like IIM-Ahmedabad and IIM-Kozhikode have started offering hybrid courses
(combination of online as well as offline) in the test preparation segment. The key players in this
segment are Byju’s, Unacademy, Vedantu, Toppr, Embibe, and Gradeup.
Online certification: Employability is the key factor driving the popularity of online professional
education. Big data, project management, mobile app development, cloud computing, and digital
marketing are some courses that are undertaken by professionals for upskilling. The prominent
Indian players in this segment are Coursera, upGrad, Eruditus, Simplilearn, Jigsaw Academy, etc.
Skill development: Edtech startups are enabling faster skill development, further upskilling, and
reskilling of gig economy workers and those in entry-level technology roles. Additionally, they are
bringing engineers and software developers up to speed with the latest and most adopted
technologies. Key players in this segment include Disprz, InterviewBit, Quizizz, Edureka, and
Crio.Do.
Enterprise solution: This segment has witnessed maximum growth as companies are integrating
such solutions to stay sustainable in a pandemic world. The major market players in this segment
are Liqvid, Classplus, Foradian, Schoolguru, Byndr, etc.
Investment trends in the Indian Edtech sector
India is among the leading markets for global venture capital funding in education, following China
and the United States. Reports suggest that the Indian education sector has received approximately
INR 300 billion (US$4.04 billion) of funding since the onset of the Covid-19 pandemic. According
to data from analytics firm Tracxn, between January and August 2021, Edtech players attracted a
whopping US$3.81 billion in funding. According to a report by Inc42 Plus, India recorded 346
Edtech funding deals between 2014 and the first half of 2020, amounting to US$2.2 billion. Out of
this total funding, nearly 79 percent went to online test preparation startups, followed by online
certification (8.4 percent) and K-12 (6 percent).
Players in the Indian Edtech industry who bagged major funding deals in 2020 were: Byju’s,
Unacademy, Vedantu, Doubtnut, Embibe, and Testbook.com in the test preparation category; Lido
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in k-12 category; Coding Ninjas in the online certification category; and Classplus in the enterprise
solution category.
Gamification of e-learning experience
Technology is being leveraged to provide an immersive learning experience to users through

improved interfaces to ensure better knowledge acquisition. Trends like simulation of concepts,
level advancement badges, and incentive-based learning are driving user engagement on Edtech
platforms like BYJU’s and Cuemath.
2. Objective and Scope of the study
2.1 Statement of study

The analytical process of estimating the worth of a company or an asset is known as valuation.
There are numerous methods for performing an evaluation. In addition to other factors, an analyst
putting a value on a firm considers the management of the company, the make-up of its capital
structure, the likelihood of future earnings, and the market worth of its assets. When trying to
determine a security's fair value, which is defined by the price a buyer is willing to pay a seller,
providing both sides enter the transaction voluntarily, a valuation might be helpful. The market
value of a stock or bond is established when an asset trades on an exchange by buyers and sellers.
However, the term "intrinsic value" refers to the estimation of a security's value based on expected
future profits or some other aspect of the company that is unconnected to the security's market
price. In this situation, appraisal is important. To evaluate if a firm or asset is overpriced or
undervalued by the market, analysts perform a valuation.
By examining an organization's income statement, balance sheet, and cash flow statement,
fundamental analysts attempt to estimate the worth of the company. An investor attempts to
determine a company's intrinsic worth in financial terms by discounting the value of predicted
future cash flows to a net present value. A method of valuation known as discounted cash flow
(DCF) is used to estimate the value of an investment based on its expected return in the future, or
future cash flows. DCF makes it easier to determine the current value of an investment based on
expected future returns. The return that could be received without taking any risks, or the
discount rate, is what is calculated. A stock price that trades below a company’s intrinsic value is
typically considered a good investment opportunity and vice versa.
The prevailing consensus among technical analysts is that there is no need to examine a company's
financial documents because the stock price already reflects all pertinent data. Instead, the
investor concentrates on looking for clues about the price's potential direction in the stock chart
itself.
The goal of this study is to help investors make decisions about whether or not to invest by helping
them understand how assets are valued. Thus, it aids in decision-making for planning and control
in the future.
2.2 Methodology and scope
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Valuation is purely based on all the information available within the company itself in the form of
records. To get the proper understanding and results, Extensive study of company’s background, Its
management, shareholding pattern, balance sheet, profit and loss a/c and cash flow statements has
been done along with future predictions after the management comments in the annual general
meetings, DCF Valuation method has been employed to financial statements of 8 years (Past 4 years
and further 4 years of projection) but the scope of study is limited up to the availability of official
records and information in the public domain of the respective companies. The study is supposed
to be related to the four companies (2 companies of each sector selected) and financial information
for the period of four years i.e. 2017-2018, 2018-2019, 2019-2020 & 2020-2021.
2.3 Objective of the study
 To analyze Quantitative aspects of the selected companies.
 To provide investors with detailed financial analysis and recommendations on whether to
buy, hold or sell particular investment.
 To evaluate at what price points the investor should enter into the particular scrip if any.
3. Pharmaceutical and Agro Chemical Stocks Fundamental analysis and

Valuation
3.1 Indian economy outlook
India’s nominal gross domestic product (GDP) at current prices is estimated to be at Rs. 232.15
trillion (US$ 3.12 trillion) in FY22.
Fig. - India’s GDP growth rate
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With more than 100 unicorns valued at a combined US$332.7 billion, India has the third-largest
unicorn population in the world.
Various economic sectors have seen investments as a result of the economic situation improving. In
February 2022, 117 agreements in the private equity and venture capital (PE-VC) sector totaled
US$5.8 billion, a 24 percent increase from January 2022.
India's exports of goods reached a record high of US$417.81 billion in FY22. In April 2022, the
Manufacturing Purchasing Managers' Index (PMI) in India stood at 54.7.
In April 2022, the total income generated by the Goods and Services Tax (GST) reached an all-time
high of Rs. 1.68 trillion (US$ 21.73 billion). This is an increase of 20% from the prior year.
The Department for Promotion of Industry and Internal Trade (DPIIT) estimates that US$572.80
billion in FDI equity entry into India occurred between April 2000 and December 2021. In the 2021
calendar year, foreign portfolio investors (FPIs) invested Rs. 5009 crore (US$ 6.68 billion).
India had signed 13 Free Trade Agreements (FTAs) with its trading partners as of April 2022,
including important trade agreements like the Comprehensive Partnership Agreement (CEPA)
between India and the United Arab Emirates and the Economic Cooperation and Trade Agreement
between India and Australia (IndAus ECTA).
On February 1, 2022, Ms. Nirmala Sitharaman, the Minister of Finance & Corporate Affairs,
presented the Union Budget for 2022–2023 to the public. PM Gati Shakti, Inclusive Development,
Productivity Enhancement, Investment, and Financing of Investments were the four priorities of
the budget. Effective capital expenditure is anticipated to rise by 27 percent, to Rs. 10.68 lakh crore
(US$ 142.93 billion), in the Union Budget 2022–23. This will account for 4.1 percent of all Gross
Domestic Product (GDP).
3.2 Industry Outlook
3.2.1 Pharmaceutical Industry
Indian Pharma Industry ranks third in terms of volume and fourteenth in terms of value. Pharma
makes for roughly 2% of India's GDP and about 8% of its exports of goods. It has more than 10500
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manufacturing facilities and a network of 3000 pharmaceutical companies. Indian pharmaceutical
exports have increased by 103% from 2013–14. In eight years, it has increased by over $10 billion
USD. In the following ten years, it is anticipated that the domestic market will increase by three
times. The market is currently worth US$42 billion and is expected to grow to US$120–130 billion.
The leading provider of generic medications worldwide is India. Pharmaceutical and drug exports
make up 5.92 percent of our total exports. It is anticipated to increase by more than 12% annually.
In FY21, Indian pharmaceutical exports to 200+ countries were US$24.44 billion.
The Indian government has approved allowing 100% foreign direct investment in the production of
medical devices. Between April 2000 and December 2021, FDI of US$19.19 billion was invested in
the Indian sector. In order to promote domestic manufacturing by building greenfield plants in four
distinct "Target Segments" with a cumulative outlay of US$ 951.27 million from FY21 to FY30, the
Finance Ministry of India approved an additional investment of US$ 26,578.3 million for the
pharmaceutical PLI scheme. The goal is to achieve self-reliance and lessen import dependency on
the nation's essential bulk drugs. The Indian pharmaceutical industry has excellent growth
potential and a wide range of future chances. Despite the COVID-19 epidemic, it showed that India
can serve as the world's pharmacy and a trustworthy and dependant partner of the international
community at times of a crisis in global health. Despite regular lockdowns, disruptions in the global
supply chain, and a weak manufacturing sector, it continued to develop at astounding rates. India
had given 71 nations a total of 586.4 lakh COVID-19 vaccinations as of May 2021.
3.2.2 Agro Chemical Industry
Agrochemicals, specialty chemicals, and petrochemicals are the three primary categories under
which India's chemical industry can be divided. India ranks fourth in the world for agrochemical
production. India ranks 14th in exports, which is a strong position. The Indian agrochemicals
industry was valued at around INR 42,000 crore in FY2020 out of which domestic consumption was
worth around INR 20,000 crore, while exports during the same period were worth around INR
22,000 crore. The industry is expected to grow at a CAGR of 8–10% till 2025 and will be driven by
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several growth levers like increasing population, decreasing arable land, increasing demand for
high-value agricultural products and increasing efforts from the industry and the Government to
promote awareness and technology penetration. India, which exports 50% of its total production,
relies heavily on agrochemicals as a source of income. With a few exceptions for hazardous
chemicals, 100% FDI under the automatic method is permitted in the chemical sector. Between
April 2000 and December 2021, FDI inflows into the chemicals sector (excluding fertilisers) totaled
US$ 19.09 billion. Due to the supply disruption in China during the COVID period, the global
industries have diversified their vendor base, leaning mostly towards Indian firms. In order
to enhance domestic production and lower imports, the Indian government intends to
explore greater potential in the sector through luring investors. Indian Chemical industry
have great potential to grow at impressive rates increasing the contribution in GDP of
India.
In terms of trade, India is a major exporter and importer of agrochemicals. India was the fifth-
largest exporter of agrochemicals in 2019 when it exported pesticides worth USD 3.4 billion (9.4%
of global exports).
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3.3 Pharmaceutical Industry stocks
3.3.1 Sun Pharma
Company Overview
Sun pharma is an Indian multinational company headquartered in Mumbai, Maharashtra. It
manufactures API’s and pharmaceutical formulations in more than 100 countries. It is India’s
largest and 4th largest specialty generic pharma company in the world. It was founded in 1983 in
Vapi, Gujarat with five products to treat psychiatry ailments. Cardiology products were introduced
in 1987 followed by gastroenterology products in 1989. Now it is market leader in cardiology (18%
of revenue), psychiatry (17%), gastroenterology (12%), ortho, diabetology, dermatology, urology.
In 1998 it acquired natco pharma, in 2010 Taro pharma, In 2014, it acquired Ranbaxy and several
others, making it the largest pharma company (8.17% market share in domestic market). Its
product portfolio comprises generics, branded generics, over the counter, API’s, Anti retrovirals
and intermediaries. Strong management team have lead the company to Rs. 331 Billion of revenue
in FY21. USA is the major contributor to its revenue at 30% share. It has 595 cumulative ANDA’s in
its bucket and 64 NDA’s as of FY21 with 94 pending ANDA’s and 9 pending NDA’s. Its stock price is
currently trading at Rs. 864 (Rs. 655 five years back). It also made 52 week high of Rs. 967. Future
plans of the company is to expand in speciality business which are high complexity medicines for
the treatment of complex or rare conditions. The reason to study this company is to get insights of
the company, it’s in depth financial performance and future growth viability.
Shareholding Pattern
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Source: Trendlyne.com
Management of the company
Dilip Shanghvi
Managing Director
Dilip Shanghvi is the founder of Sun Pharmaceutical Industries Ltd. and has extensive industrial
experience in the pharmaceutical industry. A first generation entrepreneur, Mr. Shanghvi has won
numerous awards and recognitions, including Forbes’s Entrepreneur of the Year Award (2014),
Economic Times’ Business Leader of the Year (2014), CNN IBN’s Indian of the Year (Business)
(2011), Business India’s Businessman of the Year (2011) and Ernst and Young’s World
Entrepreneur of the Year (2011). He has also been awarded the Economic Times’ Entrepreneur of
the Year (2008), Business Standard’s CEO of the Year (2008), and CNBC TV 18’s First Generation
Entrepreneur of the Year (2007).
Sailesh Desai
Executive Director
Sailesh T. Desai has more than 28 years of industrial experience, 18 of which have been in the
pharmaceutical industry. Mr. Desai has extensive and comprehensive corporate affairs experience,
being involved in the turnaround at Milmet prior to Sun Pharma’s acquisition, as well as in the early
stages of the company’s growth. He holds a BSc degree from the University of Calcutta.
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Kalyanasundaram Subramanian
Executive Director
Kalyanasundaram Subramanian (‘Kal’), (born in February, 1954) joined Sun Pharmaceutical
Industries Limited (‘Sun’) in January 2010 after 22 years with GSK. Kal is a Chemistry graduate and
a Chartered Accountant from India with 37 years of experience. He has more than three decades of
experience in the pharmaceutical industry. Mr. Kal’s career in the pharma industry began when he
joined Burroughs Wellcome in 1988. In his long association with Burroughs Wellcome (which was
acquired by Glaxo to become GlaxoWellcome and finally GlaxoSmithKline), he held various
leadership positions, including: Vice President, Head of Classic Brands Business of Emerging
Markets; Area Director South Asia & Managing Director, GSK India; Managing Director –
GlaxoWellcome, Singapore (Singapore, Indochina & Myanmar).
Sudhir Valia
Non-Independent Non-Executive Director
Sudhir V. Valia is a Member of the Institute of Chartered Accountants of India, and carries more
than three decades of experience in taxation and finance. He has been a director of Sun Pharma
since the inception of the company, and is also on the board of Taro Pharmaceuticals Ltd. Prior to
May 29, 2019 Mr. Sudhir V. Valia was Whole-time Director of the Company. He is now a Non-
Independent and Non-Executive Director of the Company with effect from May 29, 2019.
Israel Makov
Non-Executive Chairman
Mr. Makov joined Sun Pharma in 2012 and is the Chairman of the Company. Mr. Makov is the
former President & CEO of Teva Pharmaceutical Industries Ltd (2002-2007). He led the company’s
global expansion and under his leadership Teva became the undisputed global leader in the generic
pharmaceutical industry and a global leader in the treatment of Multiple sclerosis. Mr Makov is a
member of the Executive Board & Management Committee of the Weizmann Institute of Science, on
the Board of Governors of the Technion, and Director at Yeda Research and Development Company
Ltd. Mr. Makov is also Chairman of the Gesher Theatre, one of Israel’s leading theaters.
Gautam Doshi
Independent Director
Gautam Doshi, a Chartered Accountant with a Masters degree in Commerce, has been in
professional practice for over 40 years. He advises various industrial groups & families and also
serves as director on the boards of public listed and unlisted companies.
Mr. Doshi has more than 40 years of experience in wide range of areas covering Mergers and
Acquisitions, Direct, Indirect and International Taxation, Transfer Pricing, Accounting and
Corporate and Commercial Laws.
Dr. Pawan Goenka

Dr. Pawan Goenka earned his B. Tech. in Mechanical Engineering from IIT, Kanpur and Ph.D. from
Cornell University, U.S.A. He is also a Graduate of Advanced Management Program from Harvard
Business School. He worked at General Motors R&D Centre in Detroit, U.S.A. from 1979 to 1993.
Thereafter, he joined Mahindra & Mahindra Ltd., as General Manager (R&D). During his R&D tenure
he led the development of the Scorpio SUV. He was appointed COO (Automotive Sector) in April
2003, President (Automotive Sector) in September 2005, President (Automotive & Farm
19
Equipment Sectors) in April 2010. Dr. Pawan Goenka was appointed Executive Director and
President (AFS) on the Board of Mahindra & Mahindra Ltd. on 23rd September 2013.
Rama Bijapurkar
Rama Bijapurkar is a recognised thought leader on business-market strategy and India’s consumer
economy. She has an independent management consulting practice, works across sectors, and
describes her domain as bringing market focus to business strategy. She is a Professor of
Management Practice at Indian Institute of Management, Ahmedabad, and co-founder of People
Research on India’s Consumer Economy, a not-for-profit think tank and fact tank, on India’s
economy and citizen environment for use in business strategy and public policy. Ms. Bijapurkar
holds a BSc (Hons) degree in Physics from Delhi University and a post graduate diploma in
management from the Indian Institute of Management, Ahmedabad.
Key Financial Ratio’s
20
Source: Moneycontrol.com
21
Source: Sunpharma.com
Intrinsic Value and Recommendation
Recommendation: HOLD
Current stock value as on 04th July 2022: Rs. 829

Equity value of share in 2024-25: Rs. 190
Current
90.61
PE ratio
22
*Price action of last 5 years
Profitability Margins of Sun Pharma Rs. In
Million
Actual Forecast
in Rs. 2018 2019 2020 2021 2022 2023 2024 2025
125,31
Revenues 90,063 103,032 9 128,032 139,555 153,245 169,753 190,010
EBITDA 65,634 79,014 94,751 81,595 95,577 104,899 117,929 132,153
EBIT 16,191 24,748 36,610 24,994 27,379 30,255 35,268 39,725
EBT 2,802 7,194 32,530 21,529 23,393 26,269 31,283 35,739
EAT 3,623 10,003 31,303 22,030 21,960 24,582 29,152 33,215
Profitability Margins of Sun Pharma
Actual Forecast
in % of total
revenues 2018 2019 2020 2021 2022 2023 2024 2025
EBITDA 72.9% 76.7% 75.6% 63.7% 68.5% 68.5% 69.5% 69.6%
EBIT 18.0% 24.0% 29.2% 19.5% 19.6% 19.7% 20.8% 20.9%
EBT 3.1% 7.0% 26.0% 16.8% 16.8% 17.1% 18.4% 18.8%
EAT 4.0% 9.7% 25.0% 17.2% 15.7% 16.0% 17.2% 17.5%
Growth Patt ern

200000.0 190009.8 35.0%
180000.0 169753.5
30.0%
29.2%
160000.0 153245.3
25.0% 139555.0 25.0%
140000.0 24.0%
125319.3 128032.1
120000.0 20.8% 20.9%
103032.1 19.5% 19.6% 19.7% 20.0%
18.0%
100000.0 90062.5 17.5%
17.2% 17.2%
15.7% 16.0%
15.0%
80000.0
60000.0 10.0%
9.7%
40000.0 31303.4 29152.4 33215.1
22030.0 21959.9 24581.7 5.0%
20000.0 4.0%
10003.4
3623.3
0.0 0.0%
2018 2019 2020 2021 2022 2023 2024 2025
Revenues EAT EBIT EAT
Profitability Margins growth chart
23
Rs. In Million
Actual Forecast
in Rs. 2018 2019 2020 2021 2022 2023 2024 2025
Equity/Net 243,96 272,36 296,94 326,09
worth 223,226 228,436 2 250,402 1 3 6 359,311
Financial
liabilities 67,794 58,516 57,611 64,855 44,740 44,740 44,740 44,740
Trade
payable 25,660 21,549 21,293 25,926 30,112 33,066 36,628 40,999
Current 112,03 100,22 103,17 106,73
Liabilities 125,584 132,718 7 83,436 2 6 8 111,109
Fixed assets 54,750 54,347 56,131 56,872 59,973 64,862 74,227 85,775
173,53 176,12 180,41 185,14
Investments 182,673 178,387 2 169,891 1 6 5 190,472
Inventories 21,356 27,926 26,337 31,657 33,646 36,946 40,926 45,810
Trade
receivables 52,714 50,315 61,681 63,706 71,990 79,052 87,568 98,018
Liquid
assets 1,553 3,408 6,548 2,323 1,392 4,659 5,346 4,443
Current 119,41 131,52 148,39 165,66
Assets 95,752 111,698 1 120,663 9 4 2 185,287
Ratio’s trend of Sun Pharma
Actual Forecast
in % 2018 2019 2020 2021 2022 2023 2024 2025
EPS 1.5 4.2 13.0 9.2 9.2 10.2 12.2 13.8
Return on Equity(ROE) 2% 4% 13% 9% 8% 8% 9% 9%
Return on capital
employed(ROCE) 7% 10% 13% 8% 9% 9% 10% 10%
Return on Assets(ROA) 1% 3% 8% 6% 5% 6% 6% 7%
Accounts receivables turnover
ratio 1.7 2.0 2.0 2.0 1.9 1.9 1.9 1.9
Accounts payable turnover ratio 0.9 1.3 1.5 1.5 1.2 1.2 1.2 1.2
Inventory turnover ratio 1.0 1.0 1.2 1.2 1.1 1.1 1.1 1.1
Debt equity ratio(D/E) 0.1 0.1 0.1 0.2 0.1 0.1 0.1 0.1
Current ratio 0.8 0.8 1.1 1.4 1.3 1.4 1.6 1.7
Liquid ratio 0.0 0.0 0.1 0.0 0.0 0.0 0.1 0.0
Asset turnover ratio 24% 27% 33% 33% 35% 36% 37% 38%
24
Rati o's
16%
14% 13%
13%
12%
10% 10% 10%
10% 9% 9%
9% 9% 9%
8% 8% 8% 8%
8%
7% 7%
6%
6% 6% 5% 6%
4%
4%
3%
2% 2%
1%
0%
2018 2019 2020 2021 2022 2023 2024 2025
Return on Equity(ROE) Return on capital employed(ROCE) Return on Assets(ROA)
Ratio’s Trend Chart
EPS
16.0
14.0
12.0
10.0
8.0
13.8
13.0
6.0 12.2
10.2
9.2 9.2
4.0
2.0 4.2
1.5
0.0
2018 2019 2020 2021 2022 2023 2024 2025
EPS Growth rate Chart
25
Assumptions
Year 2022 2023 2024 2025

Growth of revenues in % 9.0% 9.8% 10.8% 11.9%
Changes in finished goods,
inventories and work in progress (1,645.00) (1,067.00) 1,456.00 2,831.00
Cost of materials to total revenues in
% 26.6% 26.6% 26.6% 26.6%
Purchase of stock in trade to total
revenues in % 11.0% 11.0% 11.0% 11.0%
Personnel expenses in % 15.2% 15.2% 15.2% 15.2%
Depreciation 5,980.5 6,323.7 6,980.0 7,717.3
Other Expenses 29.4% 29.4% 29.4% 29.4%
Other income 10,151.6 10,354.6 10,561.7 10,772.9
Other comprehensive income 633.0 633.0 633.0 633.0
Interest Expense (loans) 3,985.6 3,985.6 3,985.6 3,985.6
Tax rate 8.8% 8.8% 8.8% 8.8%
Cost of Capital: Assumptions

Cost of equity

Risk-free rate 8.3%

Market Risk premium 13.5%

Beta 0.74

Growth rate in terminal value 5.5%

Forecasted Profit and Loss statement of Sun Pharma

Rs. In Million
Forecast
Year 2022 2023 2024 2025
Revenues 139,555 153,245 169,753 190,010
(+) Other Income 10,152 10,355 10,562 10,773
(+) Changes in finished goods,
inventories and work in progress (1,645) (1,067) 1,456 2,831
Total revenues 148,062 162,533 181,771 203,614
(-) Cost of materials 37,092 40,730 45,118 50,502
(-) Purchase of stock in trade 15,393 16,903 18,724 20,959
(-) Excise duty - - - -
26
Gross profit 95,577 104,899 117,929 132,153
25,856.9
(-) Employee benefit expenses 21,257.13 23,342.45 9 28,942.45
(-) Depreciation 5,980 6,324 6,980 7,717
(-) Other expenses 40,960 44,978 49,823 55,769
Earnings before interest and taxes
(EBIT) 27,379 30,255 35,268 39,725
(-) Interest expenses 3,986 3,986 3,986 3,986
(-) Extra ordinary items - - - -
Earnings before taxes (EBT) 23,393 26,269 31,283 35,739
(-) Taxes on income 2,067 2,321 2,763 3,157
Earnings after taxes (EAT) 21,327 23,949 28,519 32,582
Other Comprehensive income 633 633 633 633
Net income (EATM) 21,960 24,582 29,152 33,215
Balance sheet profit at the end of the
financial year 21,960 24,582 29,152 33,215
EPS 9.15 10.25 12.15 13.84
Forecasted Balance sheet of Sun Pharma

Rs. In Million
Forecast
Year 2022 2023 2024 2025
Property, Plant & Equipment 51,683 54,650 60,322 66,693
Capital Work in progress 5,285 6,606 9,578 13,889
Other Tangible assets 3,005 3,606 4,327 5,193
Intangible assets under development 2,190 2,190 2,190 2,190
Investments in subsidiaries, associates 174,324 177,810 181,367 184,994
Financial assets Investment 429 429 429 429
Loans 191 191 191 191
Other Financial assets 659 659 659 659
Deferred tax assets and income tax assets 30,814 32,355 33,972 35,671
Other Non-current assets 3,776 4,531 5,437 6,524
Non-current assets 272,355 283,026 298,472 316,432
Inventories 33,646 36,946 40,926 45,810
Investments 1,797 2,606 3,778 5,478
Trade receivables 71,990 79,052 87,568 98,018
Loans 3,835 3,835 3,835 3,835
Other financial assets 6,732 6,732 6,732 6,732
Receivables and other assets 118,000 129,171 142,840 159,873
Liquid assets 1,392 4,659 5,346 4,443
Current tax assets - - - -
Other current assets 12,136 14,564 17,476 20,971
Current assets 131,529 148,394 165,662 185,287
Total assets 403,884 431,419 464,134 501,720
27
Rs. In Million
Forecast
Year 2022 2023 2024 2025
Subscribed capital 2,399 2,399 2,399 2,399
Reserve 269,962 294,544 323,696 356,911
Equity 272,361 296,943 326,096 359,311
Non-Current Financial liabilities 25,013 25,013 25,013 25,013
Provisions 6,288 6,288 6,288 6,288
Deferred tax liabilities - - - -
Other non-current liabilities - - - -
Non-Current liabilities 31,300 31,300 31,300 31,300
Current Financial liabilities 19,728 19,728 19,728 19,728
Trade payables 30,112 33,066 36,628 40,999
Other financial liabilities 27,019 27,019 27,019 27,019
Provisions 18,745 18,745 18,745 18,745
Other current liabilities 4,617 4,617 4,617 4,617
Current tax liabilities - - - -
Current Liabilities 100,222 103,176 106,738 111,109
Total equity and liabilities 403,884 431,419 464,134 501,720
Forecasted Cash Flow statement of Sun Pharma

Rs. In Million
Forecast
Year 2022 2023 2024 2025
Profit before tax 23,393 26,269 31,283 35,739
Depreciation and amortization on intangible
assets 5,980 6,324 6,980 7,717
Other Incomes and expenses (1,915) 1,444 3,691 2,672
Change in trade receivables, loans & advances (10,298
and other assets (9,807) ) (12,601) (15,645)
Change in Inventories (1,989) (3,301) (3,980) (4,884)
Change in trade payables, other liabilities &
provisions 16,786 2,954 3,562 4,371
Direct tax paid (6,845) (6,219) (7,618) (12,298)
Cash inflow/outflow from operating activities 25,605 17,173 21,317 17,673
Acquisition of property, plant & equipment (7,298) (8,168) (13,870) (12,903)
Proceeds from sale of property, plant &
equipment - - - -
Loans Given
Purchase and sale of investment (4,743) (3,486) (3,556) (3,627)
Bank balance not considered as cash and cash
equivalents 1,010 - - -
Interest & dividend received 2,098 7,490 6,808 8,678
Cash inflow/outflow from investing activities (8,933) (4,164) (10,618) (7,852)
Interest paid (3,986) (3,986) (3,986) (3,986)
28
Proceeds from issue of equity shares on exercise
stock option - - - -
Short term borrowings (Net) - - - -
Taxes on dividend (1,278) (1,928) (2,098) (2,156)
Buyback of shares - - - -
Dividend paid (12,239) (3,829) (3,928) (4,582)
Cash inflow/outflow from financing activities (17,503) (9,743) (10,012) (10,724)
Effect of exchange difference of foreign currency
Net cash flow (831) 3,266 688 (903)

Liquid assets as at 1 January 2,223 1,392 4,659 5,346
Cost of Equity (WACC) calculation
Cost of equity

Risk-free interest rate 8.25%

General market risk
Forecast Beta (levered Beta) 0.74
* Market risk premium 13.50%
10.05
= Individual market risk premium %

18.3
WACC %
Free cash flow to firm FCFF calculation

Rs. In Million
in Rs. 2022 2023 2024 2025

(EBIT) 27,379 30,255 35,268 39,725
- Adjusted taxes on EBIT 2,067 2,321 2,763 3,157
= NOPLAT 25,312 27,934 32,505 36,568

+ Depreciation and amortization 5,980 6,324 6,980 7,717
= Gross cash flow 31,293 34,258 39,485 44,285
- Capital expenditure (7,298) (8,168) (13,870) (12,903)
- Changes in operating working capital (10,663) (9,836) (11,846) (14,457)
= Free cash flows to the firm 49,254 52,262 65,202 71,645

WACC 18.3% 18.3% 18.3% 18.3%
Year 1 2 3 4
29
PV 0.85 0.71 0.60 0.51
PV of FCFF 41,633 37,341 39,378 36,575
Free cash flow from equity FCFE calculation

Rs. In Million
in Rs. 2,022 2,023 2,024 2,025

Free cash flows to the firm 49,254 52,262 65,202 71,645
- Interest expenses(Net of Tax) 3,633 3,633 3,633 3,633
+ Changes in financial debt - - - -
= Flow to equity 45,620 48,629 61,568 68,012

WACC 18.3% 18.3% 18.3% 18.3%
Year 1 2 3 4
PV 0.85 0.71 0.60 0.51
PV of FCFF 38,562 34,745 37,184 34,721
Sun Pharma Equity valuation

Rs. In Million
in Rs. 2,022 2,023 2,024 2,025

Growth rate 5.50%
Discount rate 18.30%
Operating free cash flow 49,254 52,262 65,202 71,645
Terminal Value 590,327
NPV of the cash flows 41,633 37,341 39,378 36,575
Sum of the present values of the cash
+ flows 154,928
+ Present value of Terminal Value 301,366

Share of TV in the sum of the cash flows 66%
= Enterprise Value 456,294
No. of outstanding shares 2,399.32
= Equity value of share 190

Current stock value on 04th July
2022 829

Price to Earnings ratio 20.78 18.56 15.65 13.74

Current
PE ratio 90.61
30
3.3.2 Granules India
Company Overview
Vertically integrated pharma manufacturing company based in Hyderabad, India. It produces
several off patented drugs such as Paracetamol, Ibuprofen, Metformin and Guaifenesin. In 1987,
Granules India formerly known as Triton laboratories became the only Indian company aside from
Dr. Reddy laboratories to export pharma products to USA. In 1995 Granules India went public. In
2013, It acquired Hyderabad based Auctus pharma, a bulk producer of API’s for Rs. 120 crore. Now
it has seven manufacturing facilities six in India and seventh is through joint venture with Hubei
biocon in Wuhan, China. Its Gagillapur manufacturing plant near Hyderabad is the world’s largest
PFI facility with a capacity of 7200 metric tonnes p.a. Its product portfolio comprises API’s (28% of
revenue), PFI’s(19%) and finished dosages(52%), it has also recently entered in CRAMS segment. It
has presence in 75+ countries (54% revenue from North America and 9% from South America). It
has 51 ANDA approvals which shows a robust research and development of the company. Backed
with strong Management team with 30+ years of experience. Granules India has been posting 30%
CAGR growth rate in Top line and bottom line with 19.9% ROE in 2020. Its EBITDA growth in 2020
was 36.8%. It is financially sound with 14 new approvals of ANDA’s in pipeline. It has also been
aiming for Rs. 1000 crore CAPEX in next three years. Its stock price is currently trading at Rs. 270
(Rs. 142 five years back). It also made 52 week high of Rs. 405. The company has enormous growth
potential and is listed in BSE 500 with a market cap of Rs. 7000 crore and Rs. 3200 crore Revenue.
The reason to study this company is to get insights of the company, it’s in depth financial
performance and future growth viability.
Shareholding pattern
Source: Growth.com
31
Mr. Krishna Prasad Chigurupati

Chairman and Managing Director
Mr. Krishna Prasad Chigurupati is the Promoter of Granules and has more than three decades of
experience in the pharmaceutical industry. In 1984, he set up a paracetamol manufacturing facility,
which has become one of the world’s reputed manufacturers of paracetamol in the regulated
markets. Mr. Prasad pioneered and popularised the concept of Pharmaceutical Formulations
Intermediates (PFIs) as a cost-efficient product for global formulations manufacturers
Mr. Arun Rao Akinepally

Mr. Akinepally Arun Rao did his B.Tech in Chemical Engineering from the University of Madras and
M.S from the Illinois Institute of Technology, Chicago, USA. He is the Managing Director of Akin
Laboratories Pvt. Ltd., a formulation manufacturing Company. Mr. Arun Rao is also on the Boards of
ESPI Industries and Chemicals Pvt. Ltd, a leading manufacturer of antacids in India and Sanzyme
Pvt Ltd a globally known manufacturer of Probiotics. Mr. Arun Rao was an office bearer of the
Indian Pharmaceutical Association both at the Central and State level.
Mr. Harsha Chigurupati

Executive Director
Mr. Harsha Chigurupati holds a Bachelor’s degree of science in Business Administration from
Boston University, USA. He has over 15 years of entrepreneurial experience in marketing, business
development, customer relationship management etc. He also has in-depth knowledge and
experience in various fields of research and development, clinical trials, regulatory and legal
framework navigation, patents and peer review journal publications etc. He holds patents in over
55 countries and has been published in a variety of esteemed peer reviewed journals. He is the
creator of a new category of better for you alcoholic beverages referred to as “Functional Spirits”.
Mrs. Uma Devi Chigurupati

Executive Director
Mrs. Uma Devi Chigurupati has rich experience of more than three decades in various fields. Mrs.
Uma with Mr. Krishna Prasad Chigurupati had co-founded Triton Laboratories Private Limited in
the year 1984, which was later amalgamated with Granules India Limited. Presently, she is spear
heading CSR activities and HR initiatives. In addition, Mrs. Chigurupati is the Director of KRSMA
Estates Private Limited, one of India’s premier boutique wineries. Mrs. Chigurupati has a post-
graduate degree in Botany (soil microbiology) from Nagarjuna University.
Mr. K. B. Sankar Rao

Non-Executive, Non-Independent Director
Mr. K. B. Sankar Rao is a post graduate from Andhra University and has rich experience of more
than three decades in various domains. Mr. K. B. Sankar Rao was associated with various reputed
organizations like Warner Hindustan, Cipla Limited and Dr. Reddy’s Laboratories Limited. He has
varied experience in the fields of technical operations, quality, supply chain, development & launch
of APIs and finished dosages for global markets and business strategy. Mr. K.B. Sankar Rao is also
Managing Director of Raje Retail Pvt Ltd, a pharmacy retail chain under the brand name- “My
Health Pharmacy” in Hyderabad.
Ms. Priyanka Chigurupati

Executive Director Granules Pharmaceuticals, Inc.
32
Ms. Priyanka Chigurupati is the Executive Director of Granules Pharmaceuticals, Inc. and
responsible for the US Generics business and Investor Relations. Ms. Chigurupati has a Bachelor of
Science degree in Business Management from Case Western Reserve University. Within Granules,
she has had a variety of roles across several divisions in the US and in India within R&D,
Commercial Operations and Investor Relations.
Mr. Robert George Cunard

Mr. Robert George Cunard holds Bachelor of Arts Degree from the University of Pittsburgh in
Business Economics. Mr. Cunard brings more than 30 years of experience in US pharmaceuticals
from the perspectives of wholesaler, retailer, and manufacturer. Mr. Cunard is currently an
Operating Partner, with HealthEdge Investment Partners, a US healthcare focused private equity
fund. Prior to HealthEdge, Mr. Cunard was CEO of Aurobindo Pharma USA, Inc., the subsidiary of
Aurobindo Pharma Limited. In the past, Mr. Cunard also held important positions in Mylan
Laboratories and Teva Pharmaceuticals.
Mr. Gsr Prasad

Chief Operating Officer
Mr. GSR Prasad has more than 30 years of rich experience in Pharmaceutical Operations including
Manufacturing, Quality, Technical / Validation Services, Supply Chain Management, Greenfield and
Brownfield Projects. He has joined us as Sr. Vice President – Projects & Operations in 2017 before
taking over as COO in 2019. Mr. GSR Prasad has earlier worked with reputed Pharmaceutical
organizations across the globe such as Astra Zeneca, Themis, Sangfroid, Granules India, Pharmeng
(Novartis), Biovail Corporation (now Valeant), and Novast Laboratories in India, Canada, USA and
China. He has done his Masters in Pharmaceutical Sciences.
Mr. Sandip Neogi

Chief Financial Officer
Mr. Sandip Neogi is a Chartered Accountant and Cost Accountant. He comes with a rich experience
of over 29 years in Strategic Financial Planning, Analysis and Business Support, Business
valuations, Enterprise Risk Management, SEC Expertise, Mergers and Acquisitions, Treasury,
Accounting under USGAAP, IFRS, Indian GAAP and Internal Financial Controls. He had earlier
worked with reputed organizations such as Nissan Motors, Hospira Healthcare, Dr. Reddy’s
Laboratories, CA-TCG Software, Tata Korf and Price Waterhouse Coopers. He is an experienced CFO
with proven track record of establishing cross-functional partnerships to deliver measurable
results.
33
Source: Indiainfoline.com
34
Source: GranulesIndia.com
Recommendation: BUY
35
Profitability margins of Granules India
Rs. In Lacs
Actual Forecast
in Rs. 2018 2019 2020 2021 2022 2023 2024 2025
209,84
Revenues 165,387 3 230,993 313,498 357,388 414,427 491,126 598,842
EBITDA 76,732 87,660 111,440 163,906 170,002 206,007 247,600 301,940
EBIT 24,138 27,007 41,877 75,664 66,629 87,088 107,464 132,011
EBT 20,845 24,171 55,303 73,287 61,926 81,635 101,002 124,131
EAT 12,689 17,333 41,702 54,727 44,810 59,071 73,085 89,822
Profitability margins of Granules India
Actual Forecast
in % of total
revenues 2018 2019 2020 2021 2022 2023 2024 2025
EBITDA 46.4% 41.8% 48.2% 52.3% 47.6% 49.7% 50.4% 50.4%
EBIT 14.6% 12.9% 18.1% 24.1% 18.6% 21.0% 21.9% 22.0%
EBT 12.6% 11.5% 23.9% 23.4% 17.3% 19.7% 20.6% 20.7%
EAT 7.7% 8.3% 18.1% 17.5% 12.5% 14.3% 14.9% 15.0%
36
Growth Patt ern
700000.0 30.0%
598841.7
600000.0
25.0%
24.1%
491126.0
21.9% 22.0%
500000.0 21.0%
20.0%
18.1% 18.6%414427.1
400000.0 17.5%
357388.0
14.6% 313498.2 14.9% 15.0% 15.0%
14.3%
300000.0 12.9% 12.5%
230992.8
209843.3 10.0%
200000.0 165386.9 8.3%
7.7%
100000.0 89821.8 5.0%

59071.2 73085.3
41702.1 54727.0 44809.7
12688.8 17332.9
0.0 0.0%
2018 2019 2020 2021 2022 2023 2024 2025
Profitability growth chart

Rs. In Lacs
Actual Forecast
in Rs. 2018 2019 2020 2021 2022 2023 2024 2025
Equity/Net 127,82 181,15 320,14 393,22 483,05
worth 0 142,324 9 216,262 261,072 3 8 0
Financial
liabilities 95,823 93,299 79,261 75,041 85,856 85,856 85,856 85,856
Trade payable 26,054 27,689 32,288 50,765 46,932 52,638 61,296 74,830
Current 109,71 118,37 131,90
Liabilities 85,695 84,284 84,745 112,833 104,006 3 0 5
105,66 132,68 145,70 163,96
Fixed assets 94,618 103,298 6 114,901 124,800 7 7 9
121,59 150,20
Investments 7,512 50,646 44,539 59,153 65,675 93,718 1 2
Inventories 22,736 31,414 34,395 46,170 51,504 57,500 68,142 83,087
Trade 139,81 165,69 202,03
receivables 69,291 70,421 62,700 101,424 120,575 9 5 6
Liquid assets 9,741 6,244 27,234 24,123 18,046 21,655 25,986 31,183
117,85 147,48 254,14 304,49 376,48
Current Assets 0 120,891 8 187,787 209,391 3 3 0
Ratio’s trend of Granules India
37
Actual Forecast
in % 2018 2019 2020 2021 2022 2023 2024 2025
EPS 5.0 6.8 16.4 22.1 18.1 23.9 29.5 36.3
Return on capital
employed(ROCE) 14% 14% 18% 30% 22% 24% 24% 25%
Accounts receivables
turnover ratio 2.4 3.0 3.7 3.1 3.0 3.0 3.0 3.0
Accounts payable
turnover ratio 4.6 6.0 5.0 3.8 5.3 5.3 5.4 5.4
Inventory turnover
ratio 3.9 4.2 3.6 3.3 3.7 3.7 3.7 3.7
Current ratio 1.4 1.4 1.7 1.7 2.0 2.3 2.6 2.9
Liquid ratio 0.1 0.1 0.3 0.2 0.2 0.2 0.2 0.2
Asset turnover ratio 63% 74% 73% 85% 86% 87% 88% 90%
Rati o's
35%
30%
30%
25% 25%
25% 24% 24%
23%
22%
20% 18% 18% 19% 19%
17%
15%
15% 14% 14% 13% 13% 14%
12% 12%
11%
10%
10%
6%
5%
5%
0%
2018 2019 2020 2021 2022 2023 2024 2025
Ratio’s trend Chart
38
EPS
40.0
35.0
30.0
25.0
20.0
36.3
15.0 29.5
22.1 23.9
10.0
16.4 18.1
5.0
5.0 6.8
0.0
2018 2019 2020 2021 2022 2023 2024 2025
EPS Growth Chart

Assumptions
Year 2022 2023 2024 2025

Changes in finished goods, inventories 59 1,27 4,98 6,10
and work in progress 8.00 8.00 1.00 9.00
Cost of materials to total revenues in % 53.7% 51.69% 51.69% 51.69%
12,3 13,3 15,0 17,4
Depreciation 60.3 80.4 64.6 26.7
Other operating expenses 16.2% 16.19% 16.19% 16.19%
Other income 1.09% 1.09% 1.09% 1.09%
Interest Expense (loans) 1.32% 1.32% 1.32% 1.32%
Tax rate 27.6% 27.6% 27.6% 27.6%

Cost of equity

Risk-free rate 8.3%


Beta 0.79
39


Forecasted Profit and loss statement of Granules India

Rs. In Lacs
Forecast
Year 2022 2023 2024 2025
Revenues 357,388 414,427 491,126 598,842
(+) Other Income 3,912 4,536 5,375 6,554
(+) Changes in finished goods, inventories
and work in progress 598 1,278 4,981 6,109
Total revenues 361,898 420,241 501,482 611,505
Gross profit 170,002 206,007 247,600 301,940
(-) Employee benefit expenses 33,137 38,426 45,538 55,525
(-) Depreciation 12,360 13,380 15,065 17,427
(-) Other expenses 57,876 67,113 79,533 96,977
(EBIT) 66,629 87,088 107,464 132,011
(-) Interest expenses 4,703 5,453 6,463 7,880
(-) Taxes on income 17,116 22,563 27,916 34,309
Other Comprehensive income - - - -
Net income (EATM) 44,810 59,071 73,085 89,822
financial year 44,810 59,071 73,085 89,822
EPS 18.09 23.85 29.51 36.27
Forecasted Balance sheet of Granules India

Rs. In Lacs
Forecast
Year 2022 2023 2024 2025
Capital Work in progress 20,681 20,681 20,681 20,681
Intangible assets - 6,419 6,419 6,419 6,419
Intangible assets under development 2,140 2,140 2,140 2,140
Investments 60,694 72,833 91,205 104,312
Loans 16,716 16,716 16,716 16,716
40
Other non-current assets 2,002 2,002 2,002 2,002
Inventories 51,504 57,500 68,142 83,087
Investments 4,981 20,885 30,386 45,890
Loans 68 68 68 68
Other financial assets 93 93 93 93
Liquid assets 18,046 21,655 25,986 31,183
Investments held for sale - - - -
Current assets 209,391 254,143 304,493 376,480
Total assets 413,602 478,380 560,123 663,479
Rs. In Lacs
Forecast
Year 2022 2023 2024 2025
Subscribed capital - 2,477 2,477 2,477 2,477
Reserve 258,595 317,666 390,752 480,573
Equity 261,072 320,143 393,228 483,050
Provisions 1,666 1,666 1,666 1,666
Deferred tax liabilities 5,009 5,009 5,009 5,009
Trade payables 46,932 52,638 61,296 74,830
Provisions 495 495 495 495
Income tax liabilities - - - -
Forecasted Cash flow statement of Granules India

Rs. In Lacs
Forecast
Year 2022 2023 2024 2025
Depreciation and amortization on intangible
assets 12,360 13,380 15,065 17,427
Other Incomes and expenses 19,145 21,217 6,852 11,555
Change in trade receivables (19,151) (19,244) (25,877) (36,341)
41
Change in Other assets (3,195) (15,904) (9,501) (15,504)
provisions (8,827) 5,706 8,658 13,534
Direct tax paid (15,192) (21,890) (26,901) (31,109)
Cash inflow/outflow from operating
activities 41,730 58,905 58,656 68,748
Purchase of fixed assets, including CWIP, and
payable for capital goods (14,187) (21,902) (20,289) (27,790)
Purchase of Investment (4,981) (15,904) (9,501) (15,504)
Investment in subsidiaries (1,541) (12,139) (18,373) (13,107)
Proceeds from sale of fixed assets - - - -
Proceeds from sale of associates - - - -
Withdrawal/placement of bank deposits - - - -
Loans given to subsidiaries - - - -
Cash inflow/outflow from investing (44,273
activities (17,688) (46,735) ) (52,380)
Interest paid (4,703) (5,453) (6,463) (7,880)
Proceeds from issuance of shares - - - -
Dividend paid (3,298) (3,108) (3,590) (3,291)
Cash inflow/outflow from financing (10,053
activities (8,001) (8,561) ) (11,171)
Effect of exchange difference on translation of
foreign currency cash and cash equivalents - - - -
Net cash flow 16,042 3,609 4,331 5,197

Cost of capital (WACC) Calculation
Cost of equity


General market risk
10.63

18.9
WACC %
42
Free cash flow to firm FCFF calculation
Rs. In Lacs
in Rs. 2022 2023 2024 2025

(EBIT) 66,629 87,088 107,464 132,011
= NOPLAT 49,513 64,525 79,548 97,702

= Gross cash flow 61,873 77,905 94,613 115,129

WACC 18.9% 18.9% 18.9% 18.9%
Year 1 2 3 4
PV 0.84 0.71 0.59 0.50
PV of FCFF 86,731 84,366 84,857 90,293
Free cash flow from equity FCFE calculation

Rs. In Lacs
in Rs. 2,022 2,023 2,024 2,025
- Interest expenses(Net of Tax) 3,403 3,946 4,677 5,702

115,39
= Flow to equity 99,750 4 138,085 174,968

WACC 18.9% 18.9% 18.9% 18.9%
Year 1 2 3 4
PV 0.84 0.71 0.59 0.50
PV of FCFF 83,870 81,577 82,077 87,443
Granules India Equity Valuation
in Rs. 2,022 2,023 2,024 2,025

Growth rate 5.50%
43
Terminal Value 1,418,762
Sum of the present values of
+ the cash flows 346,247
Present value of Terminal
+ Value 709,046
Share of TV in the sum of the
cash flows 67%
= Enterprise Value 1,055,293
No. of outstanding shares 2,476.74
Current stock value on 04th
July 2022 279
Current
15.40
PE Ratio
3.4 Agro Chemical Industry

3.4.1 PI Industries
Company Overview
PI Industries is one of India’s foremost agrochemical companies. It was incorporated in 1947 in
Udaipur, Rajasthan and it provides complex solutions in agri and pharma sciences. PI Industries
current operation consists of 5 formulation facilities as well as 13 multi-product plants under its 4
manufacturing locations. It deals in products such as Agrochemicals – Pesticides, Insecticides,
fungicides, herbicides and speciality products. Pi Product portfolio also consist of services such as
R&D services, CSM services etc. Its 75+ years of experience and wonderful management has led it to
reach 100+ patents, 70000+ retailers and Rs. 45,770 Milion revenue in FY21. In 1993, it got listed
on BSE from there on it is growing. It has revenue growth of 25.6% CAGR (FY2018-21) and EBITDA
CAGR of 27.2%, its pre - tax ROCE has been more than 22% over the last 4 years. It has now
expanded to China, Japan and Germany which has opened new markets for the company and it has
an order book of US$1.5 Billion. The company is now planning to enter Fine chemical and pharma
business to aid its further growth. It is building new infrastructures and planning to invest in
CAPEX. It also partnered with BASF for crop protection solutions in 2017. My investment in this
particular stock has motivated me to further study this scrip. It has shown a tremendous growth in
the past years, it is now trading at Rs. 2610 (Rs. 835 five years back) and touched a 52 week high of
Rs. 3535.
44
Mr. Salil Singhal

Chairman Emeritus
Mr. Salil Singhal (DIN: 00006629) has been spearheading the Company on its growth path since
1979 and currently serves as Chairman Emeritus on Board of PI. He is credited with Company’s
early adoption of a global outlook and ingraining a strong value system within the Company. He has
been involved in shaping many agriculture-related policy issues and has addressed many Seminars
and Conferences both in India and abroad.
Mr. Mayank Singhal
Vice Chairman and Managing Director
Mr. Mayank Singhal (DIN: 00006651) having joined PI Industries in 1996, Mr. Singhal, an
Engineering and Management Graduate from UK, rose to become its Joint Managing Director in
2004, its Managing Director and CEO in 2009 and subsequently PI’s Vice Chairman and Managing
Director from 2019. Besides PI Industries, he also serves the boards of PI Life Science Research Ltd.,
PILL Finance and Investment Ltd., TP Buildtech Pvt. Ltd. Fratelli Wines Pvt. Ltd. and PI Health
Sciences Ltd.
Mr. Rajnish Sarna
Joint Managing Director
Mr. Rajnish Sarna (DIN: 06429468) is a qualified Chartered Accountant and has a diverse
experience of over 3 decades in the areas of Business Development & Strategy, Customer
Relationship Mgt., Operations, Finance, Risk Mgt, Legal Contracting & Compliances, Investor
relations, Information Technology and Process Reengineering, etc. He has been associated with PI
for nearly 25 years and is responsible for the overall transformation of the Company over the last
several years by managing numerous portfolios from Finance, IT, Business Development, CSM
operations, and Merger & Acquisition related activities.
45
Mr. Narayan K. Seshadri
Independent Non-Executive Chairman
Mr. Narayan K. Seshadri (DIN: 00053563), a qualified Chartered Accountant, started his business
consultancy career with Arthur Anderson. Joining KPMG afterwards, Mr. Seshadri rose to the
position of Managing Partner of its business advisory practice in India. Besides PI Industries Ltd., he
is also the Chairman of AstraZeneca Pharma India Ltd. He serves on the Boards of Kalpataru Power
Transmission Ltd., SBI Life Insurance Co. Ltd., The Clearing Corporation of India Ltd., Clearcorp
Dealing Systems (India) Ltd.
Mrs. Ramni Nirula
Independent Non-Executive Director
Mrs. Ramni Nirula (DIN : 00015330) holds a Bachelor’s Degree in Economics and a Master’s Degree
in Business Administration from Delhi University. Possessing more than three decades of
experience in the financial sector, she has held various leadership positions in the areas of Project
Financing, Strategy, Planning and Resources and Corporate Banking. Mrs. Nirula was the Managing
Director & CEO of ICICI Securities Ltd. and also headed the Corporate Banking Group of ICICI Bank.
She serves on the Board of DCM Shriram Ltd., HEG Ltd., Usha Martin Ltd., Kirloskar Brothers
Limited, DRN Investments and Agriculture Pvt. Ltd., CG Power and Industrial Solutions Ltd. and
Azure Hospitality Pvt Ltd.
Dr. T.S. Balganesh
Independent Non-Executive Director
Dr. T.S. Balganesh (DIN: 00648534) holding a PhD in Medical Microbiology from University of
Calcutta, Dr. T.S. Balganesh completed his post-doctoral research at Brookhaven National Lab, USA
and Max Planck Institute, Germany. He has also been awarded an honorary doctoral degree from
the University of Uppsala, Sweden.
Mr. Shobinder Duggal
Additional Director
Mr. Shobinder Duggal (DIN: 00039580) holds a bachelor’s degree in Economics (Hons.) from St.
Stephens College, Delhi University and is a member of Institute of Chartered Accountants of India.
He has completed the International General Management program for executive development from
the International Institute for Management Development, Lausanne, Switzerland. He has vast
experience in finance and accounts domain and in the past has held positions at Nestle as well as
Voltas India Limited. While he was the Chief Financial Officer at Nestle India Limited.
46
Source: Money.rediff.com
47
Source: Piindustries.com
Recommendation: BUY
48
Profitability margins of PI Industries
Actual Forecast
in Rs. 2018 2019 2020 2021 2022 2023 2024 2025 2026
28,40 33,06 50,76 58,38 68,45 81,61 99,50
Revenues 23,087 9 8 42,762 9 4 6 7 9
13,50 15,41 23,91 27,38 31,38 38,00 45,77
EBITDA 11,681 7 9 20,030 3 1 0 6 0
10,12 11,33 12,72 15,86 18,83
EBIT 4,695 5,405 6,124 9,381 8 6 3 5 9
10,00 11,19 12,57 15,72 18,69
EBT 4,636 5,346 5,944 9,100 5 1 8 0 4
12,31 14,64
EAT 3,591 4,154 3,863 7,884 8,284 8,778 9,862 8 1
Profitability margins of PI Industries

Rs. In Millions
Actual Forecast
in % of total
revenues 2018 2019 2020 2021 2022 2023 2024 2025 2026
EBITDA 50.6% 47.5% 46.6% 46.8% 47.1% 46.9% 45.8% 46.6% 46.0%
EBIT 20.3% 19.0% 18.5% 21.9% 19.9% 19.4% 18.6% 19.4% 18.9%
EBT 20.1% 18.8% 18.0% 21.3% 19.7% 19.2% 18.4% 19.3% 18.8%
EAT 15.6% 14.6% 11.7% 18.4% 16.3% 15.0% 14.4% 15.1% 14.7%
49
Growth Patt ern
120000.0 25.0%
21.9% 99508.6
100000.0 20.3% 19.9% 20.0%
19.0% 19.4% 19.4%
18.5% 18.4% 18.6% 18.9%
81616.7
80000.0 16.3%
15.6% 15.1%
14.6% 15.0%68455.7 14.7%15.0%
14.4%
60000.0 58384.4
11.7% 50769.0
42762.0 10.0%
40000.0
33068.0
28409.0
23087.0
5.0%
20000.0 14640.8
12317.5
7884.0 8284.0 8778.5 9862.5
3591.0 4154.0 3863.0
0.0 0.0%
2018 2019 2020 2021 2022 2023 2024 2025 2026
Profitability growth chart
Rs. In Millions
Actual Forecast
in Rs. 2018 2019 2020 2021 2022 2023
2024 2025 2026
Equity/Net 52,91 79,02
worth 19,122 22,747 25,911 0 60,387 69,165 8 91,345 105,986
Financial
liabilities 646 289 5,825 3,058 3,257 2,615 2,615 2,615 2,615
Trade payable 3,703 5,141 5,538 7,796 8,840 7,959 9,332 11,126 13,565
Current 11,82 12,93
Liabilities 6,149 8,122 10,191 8 12,761 11,565 8 14,732 17,171
21,32 31,98
Fixed assets 10,856 13,667 19,373 1 25,372 28,196 7 37,786 42,008
11,60 15,08
Investments 1,610 1,229 4,544 3 10,358 12,571 6 18,103 21,723
14,88
Inventories 4,520 5,357 7,199 9,652 13,321 12,698 8 17,751 21,642
Trade 12,70
receivables 5,268 6,618 5,483 6,206 7,913 10,835 4 15,147 18,468
15,58 15,95
Liquid assets 1,204 831 1,104 4 13,217 15,087 7 15,947 17,973
50
42,34 58,97
Current Assets 14,521 16,874 16,619 5 47,048 51,998 9 66,736 78,928
Ratio’s trend of PI Industries
Actual Forecast
in % 2018 2019 2020 2021 2022 2023 2024 2025 2026
EPS 26.1 30.1 27.9 51.9 54.5 57.8 64.9 81.1 96.4
Return on Equity(ROE) 19% 18% 15% 15% 14% 13% 12% 13% 14%
Return on capital
employed(ROCE) 23% 23% 20% 16% 16% 16% 16% 17% 17%
Return on Assets(ROA) 14% 13% 9% 11% 11% 11% 10% 11% 12%
Accounts recievables
turnover ratio 4.4 4.3 6.0 6.9 6.4 5.4 5.4 5.4 5.4
Accounts payable turnover
ratio 3.0 2.7 3.0 3.0 3.2 3.7 3.7 3.7 3.7
Inventory turnover ratio 2.4 2.6 2.3 2.4 2.1 2.3 2.3 2.3 2.3
Debt equity ratio(D/E) 0.0 0.0 0.2 0.1 0.0 0.0 0.0 0.0 0.0
Current ratio 2.4 2.1 1.6 3.6 3.7 4.5 4.6 4.5 4.6
Liquid ratio 0.2 0.1 0.1 1.3 1.0 1.3 1.2 1.1 1.0
Asset turnover ratio 88% 90% 81% 62% 67% 70% 72% 75% 79%
Rati o's
25%
23% 23%
20%
20% 19%
18%
17% 17%
16% 16% 16% 16%
15% 15%
15% 14% 14% 14%
13% 13%
13% 12%
11% 11% 12%
11% 11% 10%
10% 9%
5%
0%
2018 2019 2020 2021 2022 2023 2024 2025 2026

Ratio trend Chart
51
EPS
120.0
100.0
80.0
60.0
96.4
40.0 81.1
64.9
51.9 54.5 57.8
20.0
26.1 30.1 27.9
0.0
2018 2019 2020 2021 2022 2023 2024 2025 2026
EPS Growth chart
Assumptions
Year 2023 2024 2025 2026

Changes in finished goods, inventories and work in (216.00
progress 345.00 ) 456.00 131.00
Purchase of stock in trade to total revenues in % 4.1% 4.1% 4.1% 4.1%
Depreciation 1,984.0 2,170.1 2,484.4 2,965.2
Other Expenses 14.8% 14.8% 14.8% 14.8%
Other income 703.0 720.6 738.6 757.1
Interest Expense (loans) 144.8 144.8 144.8 144.8
Tax rate 21.9% 21.9% 21.9% 21.9%

Cost of equity
52

Risk-free rate 8.3%


Beta 0.96


Forecasted Profit and Loss Statement of PI Industries
Rs. In Millions
Forecast
Year 2023 2024 2025 2026
Revenues 58,384 68,456 81,617 99,509
(+) Other Income 703 721 739 757
inventories and work in progress 345 (216) 456 131
Total revenues 59,432 68,960 82,811 100,397
29,677.1
(-) Cost of materials 8 34,796.49 41,486.33 50,580.91
(-) Purchase of stock in trade 2,374.02 2,783.53 3,318.69 4,046.20
Gross profit 27,381 31,380 38,006 45,770
(-) Employee benefit expenses 5,421.61 6,356.84 7,578.99 9,240.44
(-) Depreciation 1,984 2,170 2,484 2,965
(-) Other expenses 8,640 10,130 12,078 14,725
(EBIT) 11,336 12,723 15,865 18,839
(-) Interest expenses 145 145 145 145
(-) Extra ordinary items - - -
(-) Taxes on income 2,446.82 2,750.15 3,437.11 4,087.23
Net income (EATM) 8,778 9,862 12,318 14,641
financial year 8,778 9,862 12,318 14,641
EPS 57.79 64.93 81.09 96.39
Forecasted Balance sheet of PI Industries
Rs. In Millions
Forecast
53
Year 2023 2024 2025 2026
Capital Work in progress 638 638 638 638
Other Tangible assets 1,038 1,038 1,038 1,038
Intangible asset under development 343 343 343 343
Loans 54 54 54 54
Deferred tax assets 132 132 132 132
Other non-current assets 289 289 289 289
Inventories 12,698 14,888 17,751 21,642
Investments 10,256 12,308 14,769 17,723
Loans 114 114 114 114
Other financial assets 318 318 318 318
Liquid assets 15,087 15,957 15,947 17,973
Contract assets 767 767 767 767
Current tax assets 0.4 0.4 0.4 0.4
Current assets 51,998 58,979 66,736 78,928
Total assets 83,431 94,666 108,778 125,857
Rs. In Millions
Forecast
Year 2023 2024 2025 2026
Subscribed capital 152 152 152 152
Reserve 69,013 78,876 91,193 105,834
Equity 69,165 79,028 91,345 105,986
Provisions 153 153 153 153
Deferred tax liabilities 368 368 368 368
Current Financial liabilities 436 436 436 436
Trade payables 7,959 9,332 11,126 13,565
Provisions 220 220 220 220
Other current liabilities 486 486 486 486
Current tax liabilities 39 39 39 39
Forecasted Cash Flow Statement of PI Industries
54
Rs. In Millions
Forecast
Year 2023 2024 2025 2026
Depreciation and amortization on intangible assets 1,984 2,170 2,484 2,965
Other Incomes and expenses 7,533 (870) (2,115) (1,847)
Change in trade receivables, loans & advances and
other assets (3,704) (3,920) (4,904) (6,274)
Change in Inventories 623 (2,190) (2,862) (3,891)
provisions (1,196) 1,373 1,794 2,439
Direct tax paid (1,819) (2,618) (3,498) (4,698)
Proceeds from sale of property, plant & equipment - - - -
Purchase and sale of investment (504) (463) (556) (667)
Interest & dividend received 1,490 808 1,078 1,293
Cash inflow/outflow from investing activities (1,794) (4,444) (5,396) (3,992)
Interest paid (145) (145) (145) (145)
Premium on issue of equity shares under ESOP
scheme - - - -
Principal elements of deferred lease payments - (278) (198) (309)
Dividend paid (682) (786) (890) (916)
Cash inflow/outflow from financing activities (827) (1,209) (1,233) (1,370)
Net cash flow 11,992 870 (9) 2,026

Cost of capital (WACC) of PI Industries
Cost of equity


General market risk
12.93

21.2
WACC %
55
Free cash flow to firm calculation
Rs. In Millions
in Rs. 2023 2024 2025 2026

(EBIT) 11,336 12,723 15,865 18,839
= NOPLAT 8,889 9,973 12,428 14,751

= Gross cash flow 10,873 12,143 14,912 17,716

WACC 21.2% 21.2% 21.2% 21.2%
Year 1 2 3 4
PV 0.83 0.68 0.56 0.46
PV of FCFF 13,801 13,359 13,678 12,569
Free cash flow from equity calculation
Rs. In Millions
in Rs. 2,023 2,024 2,025 2,026

- Interest expenses(Net of Tax) 113 113 113 113
= Flow to equity 16,611 19,506 24,228 26,994

WACC 21.2% 21.2% 21.2% 21.2%
Year 1 2 3 4
PV 0.83 0.68 0.56 0.46
PV of FCFF 13,707 13,282 13,614 12,517
PI Industries Equity valuation
Rs. In Millions
in Rs. 2,023 2,024 2,025 2,026

Growth rate 5.50%
+ Sum of the present values of the cash flows 53,407
56
No. of outstanding shares 151.89
Current stock value on 04th July 2022 2,651


Current 4
PE ratio 5.86
3.4.2 Dhanuka Agritech
Company Overview
Dhanuka Agritech Limited formerly known as Dhanuka Pesticides Limited manufactures a wide
range of agro-chemicals like herbicides insecticides fungicides plant growth regulators in various
forms - liquid dust powder and granules. It was incorporated in 1985, and now it has technical tie
up with DU Pont US for formulations of pesticides. It has 3 manufacturing units and 39 warehouses
and a network of 75000 dealers. It has established itself across major crops (rice cotton soybean
and vegetables) and geographies (south and west). The company's production facilities are located
at Sanand in Gujarat Jaipur in Rajasthan and Udhampur in Jammu & Kashmir. It also commissioned
a state-of-the-art manufacturing facility at Keshwana (Rajasthan) on 16 March 2016. It deals in
products such as Herbicides, Fungicides Insecticides and plant growth regulators. Dhanuka Agri
now plans to invest Rs 200cr. to set up a technical manufacturing plant at Dahej for backward
integration and venturing into exports. Its management and experience is leading them to pitch a
growth rate of over 9% CAGR and continuing with this gain momentum in future. It has reached a
yearly revenue of Rs. 1388 cr. with profit margin of 15.17 % in FY 21 and 3278 Cr. of market
capitalization on stock exchange. My investment in this particular stock has motivated me to
further study this scrip. It has shown a tremendous growth in the past years.
57
Shri Ram Gopal Agarwal

Group Chairman
Shri RG Agarwal is the Founder Chairman of Dhanuka Agritech Ltd. He holds Degree in
Bachelor of Commerce (Hons) from Sri Ram college of Commerce, Delhi University. He is a
decisive and action oriented visionary who took over a sick pesticide Company named
Northern Mineral Pvt. Ltd. in 1980 to transform it into 1000 crore. organization called
Dhanuka Agritech Ltd. Shri RG Agarwal has been the past Chairman of CCFI, (Crop Care
Federation of India) the apex Chamber of all Indian Agrochemical majors. He is also Chairman
Advisory Committee of AGRO Chemicals Federation of India. Shri RG Agarwal, Group
Chairman, has been bestowed with many Awards for his tremendous contribution in Agro
Industry like “Distinguished Contribution to Indian Agrochemicals Industry” during India
Chem 2016 International Conference organised by FICCI etc.
Mr. Mahendra Kumar Dhanuka

Managing Director
Mr. Mahendra Kumar Dhanuka is the Managing Director of Dhanuka Agritech Ltd., he is an
eminent personality with vast and rich experience in the Agrochemicals Industry. He holds
Degree in Bachelor of Commerce (Hons) from Sri Ram college of Commerce, Delhi University.
In his supervision Company is debt free and financially stable. At different points, he has been
critical in maintaining relationship with different stakeholders and brings with him wide
expertise for proper functioning of the Board. He is also Director on the Board of Golden
Overseas Pvt. Ltd., Dhanuka Laboratories Ltd., Dhanuka InfoTech Pvt. Ltd and M D Build tech
Private Limited. He is highly active in social activities and has a philanthropic bent of mind.
Mr. Arun Kumar Dhanuka

Director (Executive- Non Independent)
Mr. Arun Kumar Dhanuka has distinguished corporate career and has been associated with
the organization since its inception by handling operations role in M/s. Northern Minerals
Pvt. Limited. He holds a Degree in Bachelor of Commerce (Hons) from Delhi University. He
was responsible for overall operations of Gurgaon factory. After shifting of manufacturing
operations of Gurgaon factory w.e.f. 9th January, 2018, he is taking care of Sanand factory
operations. With his innovative ideas, able leadership and utmost sincerity, he has raised the
Company to new heights of success. Mr. Arun Kumar Dhanuka is also a Director in Dhanuka
Laboratories Limited.
Mr. Rahul Dhanuka

Chief Operating Officer (COO) Executive- Non Independent
Mr. Rahul Dhanuka, the vibrant and dynamic leader has been instrumental in building a
strong and professional organization that stands tall in today’s agriculture domain. After his
formal education in Delhi with a Bachelor in Chemistry and a Master’s in Business
Administration from S.P. Jain Institute of Management & Research, Mumbai, Mr. Rahul
Dhanuka started his career with Dhanuka Agritech Ltd. in the year 2002.
58
Mr. Mridul Dhanuka
Director (Operations) Non- Executive Non-Independent
Mr. Mridul Dhanuka is a Chemical Engineer from Pune University with a Master’s in Business
Administration from NITIE, Mumbai. He is associated with Dhanuka since 2005. He was
responsible to successfully realigning the entire supply chain vertical from procurement to
sales. He has successfully improved the efficiency and productivity of all the manufacturing
facilities of Dhanuka thereby making a positive contribution in the profitability of the
Company.
Mr. Harsh Dhanuka

Director (Executive Non- Independent)
Mr. Harsh Dhanuka has been associated with the Company since 2007, he was looking after
his responsibilities as Vice President-Marketing and presently he is Director in the company.
He holds a Degree in Bachelors of Business Administration (Marketing & HR) with a Master’s
in Business Administration from Monash University, Melbourne, Australia. He has joined the
Board of Director w.e.f. 21st May, 2019. He is instrumental in driving many key initiatives
under various facets of the Company directly impacting the sales.
Mr. Vinod Kumar Bansal

Chief Financial Officer (Key Managerial Personnel)
Mr. VK Bansal is a visionary Fellow Chartered Accountant with over 30 years post
qualification experience in Business Finance, Internal Auditing, Treasury Operations,
Organizational Restructuring (Mergers & Acquisitions), Right Issues and Corporate
Governance. He has a proven track record of improved operations, maintaining continuous
profitability, Business Growth through achievements in financial management, cost controls,
internal control and productivity/efficiency improvements.
Mr. Sachin Kumar Bhartiya

Non-Executive Independent Director
Mr. Sachin Kumar Bhartiya is having more than 18 years of experience in capital market
advising and investing in mid-market corporates. He is a Fellow Chartered Accountant with a
Degree in Bachelor of Commerce from University of Calcutta. He is Partner at Lighthouse
Funds, an India dedicated mid-market focused private equity fund. At Lighthouse, he leads
agri and consumer verticals and presently he is also on the boards of Bikaji Foods (one of the
largest ethnic snacks Companies in India), Indian Herbs (the largest herbal medicine and feed
supplement company in India mainly focusing on cattle and poultry), Stylam Industries
(premium laminates maker), and Capital Trust Ltd (lending to MSME enterprises).
59
Source: Moneycontrol.com
60
Source: Dhanuka.com
Recommendation: BUY
61
Profitability margins of Dhanuka Agritech
Rs. In Lacs
Actual Forecast
in Rs. 2018 2019 2020 2021 2022 2023 2024 2025
112,00 155,39 176,28 203,15
Revenues 97,624 100,584 7 138,747 6 2 8 238,855
EBITDA 41,643 41,038 43,347 55,786 64,318 70,208 83,273 102,235
EBIT 16,788 15,485 18,220 28,763 28,423 29,411 36,284 46,801
EBT 16,701 15,396 18,064 28,494 28,273 29,260 36,134 46,651
EAT 12,701 11,207 13,775 21,186 21,397 22,140 27,310 35,221
Profitability margins of Dhanuka Agritech
Actual Forecast
in % of total revenues 2018 2019 2020 2021 2022 2023 2024 2025
EBITDA 42.7% 40.8% 38.7% 40.2% 41.4% 39.8% 41.0% 42.8%
EBIT 17.2% 15.4% 16.3% 20.7% 18.3% 16.7% 17.9% 19.6%
EBT 17.1% 15.3% 16.1% 20.5% 18.2% 16.6% 17.8% 19.5%
EAT 13.0% 11.1% 12.3% 15.3% 13.8% 12.6% 13.4% 14.7%
62
Growth Patt ern
300000.0 25.0%
250000.0 20.7% 238854.9

19.6% 20.0%
18.3%
203158.317.9%
17.2%
200000.0 16.3% 16.7%
15.4% 15.3% 176281.8
14.7% 15.0%
155396.513.8% 13.4%
13.0%
150000.0 12.3%138746.9 12.6%
11.1%
112007.1 10.0%
97624.4 100583.8
100000.0
5.0%
50000.0
35221.2
22139.7 27310.0
21185.8 21396.7
12700.5 11207.0 13774.9
17.1% 15.3% 16.1% 20.5% 18.2% 16.6% 17.8% 19.5%
0.0 0.0%
2018 2019 2020 2021 2022 2023 2024 2025
Revenues EAT EBT EBIT EAT
Profitability margin chart

Rs. In lacs
Actual Forecast
in Rs. 2018 2019 2020 2021 2022 2023 2024 2025
64,22 70,77 79,63 101,02 123,16 150,47 185,69
Equity/Net worth 63,336 2 0 1 7 7 7 8
Financial liabilities 2,823 3,752 2,399 5,805 3,695 3,695 3,695 3,695
11,32 10,86
Trade payable 8,301 7,753 1 3 11,132 12,628 14,553 17,110
16,31 19,75 27,58
Current Liabilities 15,060 6 8 5 22,130 22,603 24,528 27,085
11,78 12,11 17,45
Fixed assets 13,101 8 2 4 17,656 20,595 23,531 29,370
12,02 15,88 27,79
Investments 18,199 7 7 8 28,249 36,240 49,277 64,017
20,68 24,98 29,55
Inventories 20,499 3 6 0 34,571 39,217 45,197 53,138
21,86 24,24 24,26
Trade receivables 20,797 8 1 6 32,859 38,842 44,764 52,629
Liquid assets 1,140 133 2,629 148 1,012 1,215 1,822 2,734
Current Assets 57,719 59,43 66,63 85,82 97,084 115,01 139,30 168,90
63
2 7 8 9 4 7
Ratio’s trend of Dhanuka agritech
Actual Forecast
in % 2018 2019 2020 2021 2022 2023 2024 2025
EPS 25.9 23.6 29.0 45.5 45.9 47.5 58.6 75.6
Return on capital
employed(ROCE) 25% 23% 25% 34% 27% 23% 24% 25%
Accounts recievables
turnover ratio 4.7 4.6 4.6 5.7 4.7 4.5 4.5 4.5
Accounts payable turnover
ratio 4.8 7.0 5.1 7.0 7.0 7.0 7.0 7.0
Inventory turnover ratio 1.9 2.6 2.3 2.6 2.3 2.3 2.3 2.3
Current ratio 3.8 3.6 3.4 3.1 4.4 5.1 5.7 6.2
Liquid ratio 0.1 0.0 0.1 0.0 0.0 0.1 0.1 0.1
119 120 120 123
Asset turnover ratio % % % % 122% 118% 114% 110%
Rati o's
40%
35% 34%
30%
27% 27%
25% 25% 25%
25% 23% 23% 24%
21%
20% 19%
20% 19% 18% 19%
17% 18%
17% 16%
15% 15% 15% 15%
15% 13%
10%
5%
0%
2018 2019 2020 2021 2022 2023 2024 2025
Ratio’s trend chart
64
EPS
80.0
70.0
60.0
50.0
40.0
75.6
30.0 58.6
45.5 45.9 47.5
20.0
25.9 29.0
10.0 23.6
0.0
2018 2019 2020 2021 2022 2023 2024 2025
EPS Growth rate chart

Assumptions
Year 2022 2023 2024 2025

Changes in finished goods, inventories and 1,245.0 (1,067.00 1,456.0
work in progress 0 ) 0 6,431.00
Purchase of stock in trade to total revenues
in % 10.8% 10.8% 10.8% 10.8%
Depreciation 1,887.3 2,219.4 2,529.7 3,162.6
Other Expenses 12.1% 12.1% 12.1% 12.1%
Other income 2,400.7 2,448.7 2,497.6 2,547.6
Interest Expense (loans) 150.4 150.4 150.4 150.4
Tax rate 24.8% 24.8% 24.8% 24.8%

Cost of equity

Risk-free rate 8.3%

65

Beta 0.38


Forecasted Profit and loss statement of Dhanuka Agritech

Rs. In Lacs
Forecast
Year 2022 2023 2024 2025
Revenues 155,396 176,282 203,158 238,855
(+) Other Income 2,401 2,449 2,498 2,548
inventories and work in progress 1,245 (1,067) 1,456 6,431
Total revenues 159,042 177,663 207,112 247,834
(-) Purchase of stock in trade 16,809 19,068 21,975 25,836
Gross profit 64,318 70,208 83,273 102,235
17,288.4 23,425.2
(-) Employee benefit expenses 15,240.20 8 19,924.34 2
(-) Depreciation 1,887 2,219 2,530 3,163
(-) Other expenses 18,767 21,289 24,535 28,846
(EBIT) 28,423 29,411 36,284 46,801
(-) Interest expenses 150 150 150 150
(-) Taxes on income 7,006 7,250 8,954 11,560
Net income (EATM) 21,397 22,140 27,310 35,221
financial year 21,397 22,140 27,310 35,221
EPS 45.94 47.53 58.63 75.62
Forecasted Balance sheet of Dhanuka Agritech

Rs. In Lacs
Forecast
Year 2022 2023 2024 2025
Capital Work in progress 759 759 949 1,187
Other Tangible assets 193 193 193 193
66
Loans 387 387 387 387
Other non-current assets 1,580 1,896 2,275 2,730
Inventories 34,571 39,217 45,197 53,138
Investments 18,768 25,337 36,738 49,597
Loans 3,434 3,434 3,434 3,434
Other financial assets 3,313 3,313 3,313 3,313
133,44
Receivables and other assets 92,944 110,142 5 162,110
Liquid assets 1,012 1,215 1,822 2,734
Current tax assets - 535 750 1,049
139,30
Current assets 97,084 115,019 4 168,907
178,87
Total assets 127,022 149,634 0 216,648
Rs. In Lacs
Forecast
Year 2022 2023 2024 2025
Subscribed capital 932 932 932 932
Reserve 100,096 122,235 149,545 184,767
123,16
Equity 101,027 7 150,477 185,698
Provisions 273 273 273 273
Deferred tax liabilities 979 979 979 979
Other non-current liabilities - - - -
Trade payables 11,132 12,628 14,553 17,110
Provisions 26 26 26 26
Current tax liabilities 1,023 - - -
149,63
Total equity and liabilities 127,022 4 178,870 216,648
Forecasted Cash Flow statement of Dhanuka Agritech

Rs. In Lacs
67
Forecast
Year 2022 2023 2024 2025
Depreciation and amortisation on intangible assets 1,887 2,219 2,530 3,163
Other Incomes and expenses (1,306) (178) 1,107 1,540
Change in trade receivables, loans & advances and
other assets (5,372) (13,087) (17,698) (20,751)
provisions (5,455) 473 1,925 2,557
Direct tax paid (6,845) (6,219) (7,618) (12,298)
Proceeds from sale of property, plant & equipment - - - -
Purchase and sale of investment (451) (1,422) (1,636) (1,881)
Cash inflow/outflow from investing activities 457 (1,712) (3,617) (5,121)
Interest paid (150) (150) (150) (150)
Payment of principal portion of lease liabilities - - - -
Taxes on dividend (1,278) (1,928) (2,098) (2,156)
Dividend paid (4,239) (3,829) (3,928) (4,582)
Cash inflow/outflow from financing activities (5,667) (5,907) (6,176) (6,888)

Net cash flow 951 202 607 912

Liquid assets as at 1 January 61 1,012 1,215 1,822
Cost of Capital (WACC) of Dhanuka Agritech
Cost of equity


General market risk
13.50
* Market risk premium %
= Individual market risk premium 5.17%

13.4
WACC %
68
Free Cash flow to the firm FCFF Calculation
Rs. In Lacs
in Rs. 2022 2023 2024 2025

(EBIT) 28,423 29,411 36,284 46,801
= NOPLAT 21,417 22,160 27,331 35,242

= Gross cash flow 23,305 24,380 29,860 38,404

WACC 13.4% 13.4% 13.4% 13.4%
Year 1 2 3 4
PV 0.88 0.78 0.69 0.60
PV of FCFF 34,463 28,213 30,695 34,625
Free cash flow from the equity FCFE Calculation

Rs. In Lacs
in Rs. 2,022 2,023 2,024 2,025

- Interest expenses(Net of Tax) 113 113 113 113
= Flow to equity 38,975 36,180 44,672 57,186

WACC 13.4% 13.4% 13.4% 13.4%
Year 1 2 3 4
PV 0.88 0.78 0.69 0.60
PV of FCFF 34,364 28,125 30,618 34,557
Dhanuka Agritech Equity Valuation

Rs. In Lacs
in Rs. 2,022 2,023 2,024 2,025

Growth rate 5.50%
69
+ Sum of the present values of the cash flows 127,997
No. of outstanding shares 465.78
= Equity value of share 1,265
Current stock value on 04th July 2022 688


Current
PE ratio 14.99
4. Conclusion
By this research, it can be taken into account that there are several factors while valuing a
particular stock or an industry. By forecasting financial performances of the company’s, using
assumptions and using DCF valuation method, company’s valuation were evaluated. In Sun pharma,
stock price on 04th July 2022 was Rs. 829 which is valued at 90.61 PE multiples whereas the equity
valuation at 20.78 PE multiple is Rs. 190 and considering the growth till 2025 at current PE
multiples i.e. 90.61, the stock price would be Rs. 1250 which is expensive. Therefore a hold call has
been given to the stock. In Granules India, stock price on 04 th July 2022 was Rs. 279 which is valued
at 15.40 PE multiples whereas the equity valuation at 23.55 PE multiple is Rs. 426 and considering
the growth till 2025 at current PE multiples i.e. 15.40, the stock price would be Rs. 558.66 which is
cheap compared to its growth rate. Therefore a buy call has been given to the stock. In PI Industries,
stock price on 04th July 2022 was Rs. 2651 which is valued at 45.86 PE multiples whereas the equity
valuation at 15.72 PE multiple is Rs. 908 and considering the growth till 2025 at current PE
multiples i.e. 45.86, the stock price would be Rs. 4420 which is cheap compared to its growth rate.
Therefore a buy call has been given to the stock. In Dhanuka agritech, stock price on 04 th July 2022
was Rs. 688 which is valued at 14.99 PE multiples whereas the equity valuation at 27.54 PE
multiple is Rs. 1265 and considering the growth till 2025 at current PE multiples i.e. 14.99, the
stock price would be Rs. 1133 which is not expensive. Therefore a buy call has been given to the
stock.
70
References
1. Economic Times (2022).https://economictimes.indiatimes.com/sbi-mutual
fund/mutualfundssearch/amcid-25.cms
2. Money Control (2022).https://www.moneycontrol.com/sensex/bse/sensexlive?
utm_source=MC_INMAIL
3.YahooFinance(2022).https://finance.yahoo.com/quote/0P00011MAX.BO/history?
period1=1498953600&period2=1656720000&interval=1mo&filter=history&frequency=1mo&incl
udeAdjustedClose=true
4. https://www.Ibef.org/
5. https://www.business-standard.com/
6. https://www.bseindia.com/
7. https://www.PIIndustries.com/
8. https://www.Granulesindia.com/
9. https://www.amgfunds.com/
10. https://www.doc.morningstar.com/
11. https://www.sunpharma.com/
12. https://www.dhanukaagritech.com/
13. https://www.trendlyne.com/
14. https://www.Growth.com/
15. https://www.angelbroking.com/
16. https://www.ICICIDirect.com/
17. https://www.motilaloswal.com/
18. https://www.money.rediff.com/
19. https://www.indiainfoline.com/
20. Pamela Peterson Drake, Frank J. Fabozzi. "The Basics of Finance", Wiley, 2010
21. Mustafa Akan, Arman Teksin Tevfik. "Fundamentals of Finance", Walter de Gruyter GmbH, 2020
22. https://www.rbi.com/
23. https://www.kpmg.com/
71
24. https://www.Statista.com/
25. https://www.ministryofcommerce.com/
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INTERNSHIP PROJECT REPORT

“INDIAN PHARMA AND AGRO CHEMICAL SECTOR – BULL OR

A report submitted in partial fulfillment of the requirements for the award of

UNDER THE SUPERVISION OF

BIRLA INSTITUTE OF MANAGEMENT AND TECHNOLOGY, GREATER NOIDA

Mr. Nisant Mohta (Fincrux Technologies)

Re: Summer Project Report

Attached herewith is a copy of my summer-project report “INDIAN PHARMA AND AGRO

Your suggestions/comments would be appreciated.

Executive Summary 7-8

1.1 Company Overview 9

2.1 Statement of study 12

2.2 Methodology and Scope 12

3.3.1 Sun Pharma 17-30

Sun Pharma: Hold

Granules India: Buy

Dhanuka Agritech: Buy

1.2 Product portfolio

Test preparation US$210 million US$1.51 billion

Online certification US$152 million US$552 million

Skill development US$69 million US$292 million

Total US$750 million US$4 billion

Categories of the digital learning market in India and major players

Investment trends in the Indian Edtech sector

Gamification of e-learning experience

Technology is being leveraged to provide an immersive learning experience to users through

2. Objective and Scope of the study

2.1 Statement of study

3. Pharmaceutical and Agro Chemical Stocks Fundamental analysis and

Fig. - India’s GDP growth rate

Dr. Pawan Goenka

Key Financial Ratio’s

Intrinsic Value and Recommendation

Current stock value as on 04th July 2022: Rs. 829

Profitability Margins of Sun Pharma

Growth Patt ern

Revenues EAT EBIT EAT

Profitability Margins growth chart

Ratio’s trend of Sun Pharma

Return on Equity(ROE) Return on capital employed(ROCE) Return on Assets(ROA)

Ratio’s Trend Chart

EPS Growth rate Chart

Year 2022 2023 2024 2025

Cost of Capital: Assumptions

Forecasted Profit and Loss statement of Sun Pharma

Forecasted Balance sheet of Sun Pharma

Forecasted Cash Flow statement of Sun Pharma

Cost of Equity (WACC) calculation

Free cash flow to firm FCFF calculation

in Rs. 2022 2023 2024 2025

Free cash flow from equity FCFE calculation

in Rs. 2,022 2,023 2,024 2,025

= Flow to equity 45,620 48,629 61,568 68,012

Sun Pharma Equity valuation

in Rs. 2,022 2,023 2,024 2,025

+ Present value of Terminal Value 301,366

= Enterprise Value 456,294