Sunpharma analysis

EXECUTIVE SUMMARY

Fundamental analysis involves analyzing the underlying forces that affect the well

being of the economy, industry groups, and companies. Most often, the aim of

company analysis is to derive a stock's current fair value and forecast future value. If

fair value is not equal to the current stock price, fundamental analysts believe that the

stock is either over or under valued and the market price will ultimately gravitate

towards fair value. By believing that prices do not accurately reflect all

available information, fundamental analysts look to capitalize on perceived price

discrepancies.

In this project an attempt has been made to analyzed financial performance of Sun

Pharmaceuticals Industries limited.

Earlier part of the report gives information about Indian economy and Industry

scenario

And the later part of the project gives information about company financial

performance and ratios analysis.

This study will help us to determine the financial health of a company.

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INDIAN ECONOMY

Indian Economy has covered a long ground since it was liberalized in 1991. Today,

India has the fourth largest economy in terms of purchasing power parity (PPP)

behind only the USA, China, and Japan. It is slated to overtake Japan and

become the third major economic power in the next ten years. India is also one of

the few markets in the world which offers high prospects for growth and earning

potential in practically all areas of business. Indian economic growth has been

among the fastest in the world in the recent Years.

India was a highly protected, semi-socialist autarkic economy till 1991. There

were numerous structural and bureaucratic impediments in setting up a new

business and Foreign investment was not welcomed. The opening up of the Indian

economy in 1991, Unleashed the latent entrepreneurial talent of the Indian and in less

than two decades India has established itself as the next economic superpower of the

world.

Now in mid 2009, the global economy is showing incipient signs of stabilization, of

course not recovery. The pace of decline in economic activity in several major

advanced economies has slowed, frozen credit markets have thawed and equity

markets have begun to recover. Recent months have witnessed industrial activity

reviving in a number of emerging market economies (EMEs) such as China, Korea,

Brazil and India. Notwithstanding some positive signs, the path and the time horizon

for global recovery remain uncertain. Consumption demand remains subdued as

unemployment levels have raised. Business and consumer confidence are yet to show

definitive signs of revival. Global trade, according to the International Monetary

Fund (IMF), is projected to shrink by over 12 per cent in 2009; private capital flows

are also expected to decline. The continuing process of balance sheet adjustment by

both households and businesses is inhibiting recovery in many economies. Reflecting

these several uncertainties, the IMF, in its latest World Economic Outlook (WEO)

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update released in July 2009, has further revised downwards the global growth

forecast for 2009 to (-)1.4 per cent from its April 2009 forecast of (-)1.3 per cent.

The crisis, which affected the global financial system and engulfed most countries of

the world, had all the ingredients for a severe disruption of the world economy on the

scale of the Great Depression.  However, it was mitigated by bold, large and decisive

actions taken in concert by governments and central banks in each country, and

which came to be increasingly co-ordinate across countries. Consequently, while the

financial sector appears to be stabilizing, economic recession in the real sector

persists.

The Indian economy experienced a significant slowdown in 2008-09 in comparison

with the robust growth performance in the preceding five years, largely due to the

knock-on effect of the global financial crisis. The worst hit has been the export

sector, which has been recording negative growth since October 2008. This, in turn,

impacted the manufacturing sector. Investment demand was also dented by the

decline in corporate profitability and increased uncertainties about future prospects.

Private consumption decelerated significantly. The services sector, which has been

the main driver of growth for more than a decade, also slowed down. The financial

sector, however, remained relatively unaffected despite the severe stress caused by

the global deleveraging process, which triggered capital outflows in the second half

of 2008-09.

Global Outlook:

The deterioration in the global outlook that started in September 2008 continued in

the second quarter of 2009, although some tentative signs of stabilization have begun

to emerge. Reflecting the continued decline, the IMF in its July Update of the World

Economic Outlook (WEO) has projected that the global economy will shrink by 1.4

per cent in 2009, a shade more than the contraction of 1.3 per cent projected earlier

in April 2009.  The global economy is, however, projected to recover and expand by

2.5 per cent in 2010 (Table 1). Projections by other international agencies such as the

World Bank also do not hold any promise of recovery in 2009.

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Table 1: Global GDP Growth (%)

Country/Region 2009 2010US (-) 2.6 0.8UK (-) 4.2 0.2Euro Area (-) 4.8 (-) 0.3Japan (-) 6.0 1.7China 7.5 8.5India 5.4 6.5World (-)1.4 2.5

Source: IMF World Economic Outlook, July 8, 2009.

In the US, real GDP declined at an annual rate of 5.5 per cent in Q1 of 2009, driven

mainly by a decline in consumption and exports. The IMF’s July WEO Update has

projected real GDP of the US to shrink by 2.6 per cent in 2009, a slight improvement

from a contraction of 2.8 per cent projected in the April WEO. The main

macroeconomic indicators continued to be adverse in Q2 of 2009 with the

unemployment rate increasing to 9.5 per cent in June 2009 accompanied by a dip in

wage growth, industrial production, capacity utilization and consumer sentiment.

Retail sales and consumption continued to be weak as households were still engaged

in repairing their balance sheets ruptured by the fall in asset prices. The below trend

growth is likely to persist for some more time. Consequently, spare capacity and

unemployment are expected to rise

Domestic Outlook

The Indian economy grew by 6.7 per cent in 2008-09 according to the revised

estimates of the Central Statistical Organization (CSO) – better than most analysts

had expected, but lower than the growth of 9.0 per cent in 2007-08. The deceleration

in GDP growth was particularly pronounced during the second half of 2008-09,

largely due to the adverse impact of the global economic crisis.

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Table 2: Real GDP Growth (%)

Activity Financial Year Quarterly Growth

Q1 (Apr-Jun)

Quarterly Growth

Q2(Jul-Sep)

Quarterly Growth

Q3(Oct-Dec)

Quarterly Growth

Q4(Jan-Mar)

2007-08

2008-09

Agriculture

4.9 1.6 3.0 2.7 (-) 0.8 2.7

Industry 7.4 2.6 5.1 4.8 1.6 (-) 0.5Services 10.8 9.4 10.0 9.8 9.5 8.4Overall GDP

9.0 6.7 7.8 7.7 5.8 5.8

Source: Central Statistical Organization (CSO).

Agriculture

The agriculture sector, which recorded an average annual growth rate of 4.9 per cent

during 2003-08, expanded only by 1.6 per cent during 2008-09. In 2008-09, food

grains production was 233.9 million tons, up from 230.8 million tons last year. This

was also an all-time high. Allied activities – horticulture, floriculture, forestry,

livestock and fisheries – which account for a substantial share in agriculture remained

buoyant. However, the production of commercial crops such as major oilseeds,

cotton, jute and sugarcane was lower.  Looking ahead to the current year, the

progress of the south-west monsoon has been slow and halting. By July 22, 2009,

monsoon rainfall was 19 per cent below normal in the country as a whole. At a

disaggregated level, rainfall was deficient/scanty in 19 of the 36 meteorological sub-

divisions. While kharif sowing has picked up in July, the delayed monsoon can

impact agricultural output. Although the share of agriculture and allied activities in

GDP has declined over the years and is currently at 17.5 per cent, good agricultural

performance is critical not only because it employs over 55 per cent of the labour

force but also for ensuring stability in food prices.

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Industry

Industrial sector growth decelerated significantly to 2.6 per cent in 2008-09 from 8.5

per cent in the previous year due largely to negligible/negative growth during four

months in the second half of the year. This pushed down the growth rate of the index

of industrial production (IIP) to an abysmally low of 0.4 per cent during the second

half of 2008-09 from 5.0 per cent in the first half. During April-May 2009, however,

industrial growth turned positive with IIP increasing by 1.9 per cent. While growth in

the basic, intermediate and consumer durable goods sectors picked up, the capital

goods and consumer non-durable sectors showed negative growth. The core

infrastructure sector, with a weight of 26.7 per cent in the IIP, recorded a higher

growth of 4.8 per cent during April-June 2009, up from 3.5 per cent in the

corresponding period in the previous year. The leading indicators of industrial

production, both quantitative and qualitative, suggest that the recent downturn has

been arrested and a pick-up is on the way forward, albeit with some lag.

Services

the performance of the services sector during April-May 2009 presents a mixed but

predictable picture. Trade-related services such as cargo handled at major sea and

airports, as also passengers handled at international terminals continue to show

deceleration/negative growth. Domestic activity-related services such as

communication and construction are showing signs of upturn.

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INDIAN PHARMACEUTICAL INDUSTRY

Indian pharmaceutical sector has an estimated market value of about US $10 billion.

It's at 4th rank in terms of total pharmaceutical production and 13th in terms

of value. It is growing at an average rate of 7.2 % and is expected to grow to US $

14 billion by 2011.

Over the last two years the pharmaceutical market value has increased to about US $

355 million because of the launch of new products. According to an estimate, 3900

new generic products have been launched in the past two years. These have been by

and large launched by big brands in the pharmacy sector.

With the Product Patent Act, which came into action in January 2005, this

industry is able to attract big MNCs to India. Earlier these big firms had

apprehensions in launching new drugs in the Indian market.

At present, a large number of Indian pharmaceuticals companies are looking for tie-

ups with foreign firms for in-license drugs. GlaxoSmithKline is among the top

choices for the firms that wish to launch their product in India, but do not have any

branch over here.

Contract research and pharmaceutical outsourcing are the new avenues in the

Pharmaceutical market. Contract manufacturing is growing at a very fast pace

and is estimated to grow to US $ 30billion, whereas contract research is estimated to

reach US $ 6-10 billion.

Indian multinational companies like Dr. Reddy’s Lab, Sun Pharmaceuticals Ltd,

Cipla, Ranbaxy, etc have created awareness about the Indian market prospects in the

international pharmaceutical market.

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Approvals given by Foods and Drugs Administration (FDA) and ANDA

(Abbreviated New Drug Application)/DMF (Drug Master File) have played an

important role in making India a cost-effective and high quality product

manufacturer. Furthermore, the changes that took place in the patent law,

change of process patent to product patent, have helped in reducing the risk of

loss for intellectual property.

According to industry estimates, generics are estimated to witness a revenue CAGR

of 9% over 2008-2013 to US$ 135bn. It is expected that the emerging markets will

continue to expand while the matured generics markets slow down further. Volume

growth of 10-11%, coupled with 4-5% growth from new product launches and 7-8%

price erosion in existing products would be the key components of growth.

Key growth drivers are an ageing world population, rising healthcare spending and

increasing acceptance for generics. As we move towards 2050, the world population

in the age group of 40-59 and 60+ are estimated to jump from 1.4bn to 2.3bn and

0.7bn to 1.9bn respectively. This would put further pressure on the spiraling

healthcare spending of the developed countries which has been growing faster than

the GDP. The government of these countries would have no choice but to increase

generic penetration. Generics are also gaining increasing acceptance from regulated

markets. A case in point is Japan which has a generic penetration target of 30% in

volume by 2012 from 5% (US$ 3bn) currently.

We have witnessed a series of acquisitions/partnerships announced in the

emerging markets lately.

Acquisition in these markets has picked up steam starting in 2008 when

innovators realized the need to be in these markets for sustainability.

Large pharmacy companies like Pfizer have announced a greater need to be

present in emerging markets. GlaxoSmithKline and Dr Reddy’s recently formed

a strategic alliance to develop and market over 100 products in emerging

markets. We expect more such deals to be signed between generics and

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innovators for the emerging markets.

TARGETTING EMERGING MARKETS:

The slowing US and EU markets are forcing pharmacy companies to look at

emerging markets led by BRICS (Brazil, Russia, India, China and South Africa)

more seriously for growth.

These markets have strong growth potential (estimated to witness a CAGR of

12-15% over 2009-2014) driven by increasing per capita spend, lower

penetration of modern medicines, increasing insurance penetration and

improving lifestyle. These markets are branded in nature and therefore offer

higher margins but have strong entry barriers in the form of doctor relationship

and brand recalls

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Increasing innovator – generic acquisitions/ partnerships:

Acquisition of Ranbaxy by Daiichi Sankyo in 2008 is a case in point where

synergies can be leveraged between an innovator and a generic company.

Recent announcements between Pfizer-Eurobond Parma and Claris Life science

and the latest alliance between GSK and Dr Reddy’s for over 100 products in the

emerging markets highlight the need for partnership models in pharma.

We believe more acquisitions particularly in the emerging markets, would

unfold over the next few years. We are also seeing generic companies building

pipelines for proprietary products which could hit the market in 2012-13.

SWOT ANALYSIS OF PHARMA SECTOR

STRENGTHS:

Cost effective technology

Strong and well-developed

manufacturing base

Clinical research and trials

Knowledge based, low- cost

manpower in science &

technology

Proficiency in path-breaking

research

High-quality formulations and

drugs

High standards of purity

World-class process

development labs

WEAKNESSES

Low Indian share in world

pharmaceutical market (about

2%)

Lack of strategic planning

Fragmented capacities

Low R&D investments

Absence of association

between institutes and industry

Low healthcare expenditure

Production of duplicate drugs

OPPORTUNITIES

Incredible export potential

Increasing health

consciousness

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New innovative therapeutic

products

Globalization

Drug delivery system

management

Increased incomes

Production of generic drugs

Contract manufacturing

Clinical trials & research

Drug molecules

THREATS

Small number of discoveries

Competition from MNCs

Transformation of process

patent to product patent

(TRIPS)

Outdated Sales and marketing

methods

Non-tariff barriers imposed by

developed countries

FUTURE SCENARIO

The dream of Indian pharmaceutical companies for marking their presence globally

and competing with the pharmaceutical companies from the developed countries like

Europe, Japan, and United States is now coming true.

The new patent regime has led many multinational pharmaceutical companies to look

at India as an attractive destination not only for R&D but also for contract

manufacturing, Conduct of clinical trials and generic drug research. With market

value of about US$ 45billion in 2005, the generic sector is expected to grow to US$

100 billion in the next few years.

The Indian companies are using the revenue generated from generic drug sales

to Promote drug discovery projects and new delivery technologies. Contract

research in India is also growing at the rate of 20-25% per year and was valued at

US$ 10-120million In 2005. India is holding a major share in world's contract

research business activity and It continues to expand its presence.

Clinical Research Outsourcing (CRO), a budding industry valued over US$ 118

million Per year in India, is estimated to grow to US$ 380 million by 2010, as MNCs

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are entering the market with ambitious plans. By revising its R&D policies the

government is trying to boost R&D in domestic pharma industry. It is giving tax

exemption for a period of ten years and relieving customs and excise duties of all

the drugs and material imported or exported for clinical trials to promote

innovative R&D.

THE FUTURE OF INDIAN PHARMACEUTICAL SECTOR IS VERY

BRIGHT BECAUSE OF THE FOLLOWING FACTORS :

Clinical trials in India cost US$ 25 million each, whereas in US they

cost between US$ 300-350 million each.

Indian pharmaceutical companies are spending 30-50% less on custom

synthesis services as compared to its global costs.

In India investigational new drug stage costs around US$ 10-15

million, which is almost 1/10th of its cost in US (US$ 100-150million).

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CHALLENGES: PHARMA SECTOR

Attracting and retaining skilled workforce.

Controlling operating costs.

Generic competition.

Fake drugs.

Pricing pressure & shrinking margins.

Managing regulatory Compliance.

Sustaining growth in global market.

Intellectual Property Protection

Realizing tangible value from strategic alliances, joint ventures (JVs) and

partnering arrangements

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ANALYSIS OF COMPANY

Overview:

The methods used to analyze securities and make investment decisions fall into two

very broad categories: fundamental analysis and technical analysis. Fundamental

analysis involves analyzing the characteristics of a company in order to estimate its

value. Technical analysis takes a completely different approach; it doesn't care one

bit about the "value" of a company or a commodity. Technicians (sometimes called

chartists) are only interested in the price movements in the market.

Despite all the fancy and exotic tools it employs, technical analysis really just studies

supply and demand in a market in an attempt to determine what direction, or trend,

will continue in the future. In other words, technical analysis attempts to understand

the emotions in the market by studying the market itself, as opposed to its

components. If you understand the benefits and limitations of technical analysis, it

can give you a new set of tools or skills that will enable you to be a better trader or

investor.

What Is Fundamental Analysis?

Fundamental analysis is the cornerstone of investing. In fact, some would say that

you aren't really investing if you aren't performing fundamental analysis.Because the

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subject is so broad, however, it's tough to know where to start. There are an endless

number of investment strategies that are very different from each other, yet almost all

use the fundamentals.

The goal of this tutorial is to provide a foundation for understanding fundamental

analysis. It's geared primarily at new investors who don't know a balance sheet from

an income statement.While you may not be a "stock-picker extraordinaire" by the

end of this tutorial, you will have a much more solid grasp of the language and

concepts behind security analysis and be able to use this to further your knowledge in

other areas without feeling totally lost.

The biggest part of fundamental analysis involves delving into the financial

statements. Also known as quantitative analysis, this involves looking at revenue,

expenses, assets, liabilities and all the other financial aspects of a company.

Fundamental analysts look at this information to gain insight on a company's future

performance. A good part of this report will be about the balance sheet, income

statement, cash flow statement and how they all fit together.

What Is Technical Analysis?

Technical analysis is a method of evaluating securities by analyzing the statistics

generated by market activity, such as past prices and volume. Technical analysts do

not attempt to measure a security's intrinsic value, but instead use charts and other

tools to identify patterns that can suggest future activity.

Just as there are many investment styles on the fundamental side, there are also many

different types of technical traders. Some rely on chart patterns, others use technical

indicators and oscillators, and most use some combination of the two. In any case,

technical analysts' exclusive use of historical price and volume data is what separates

them from their fundamental counterparts. Unlike fundamental analysts, technical

analysts don't care whether a stock is undervalued - the only thing that matters is a

security's past trading data and what information this data can provide about where

the security might move in the future.

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The field of technical analysis is based on three assumptions:

1.     The market discounts everything.

2.     Price moves in trends.

3.     History tends to repeat itself.

Technical analysis can be used on any security with historical trading data. This

includes stocks, futures and commodities, fixed-income securities, forex, etc. In this

tutorial, we'll usually analyze stocks in our examples, but keep in mind that these

concepts can be applied to any type of security. In fact, technical analysis is more

frequently associated with commodities and forex, where the participants are

predominantly traders.

Fundamental Vs. Technical Analysis:

Technical analysis and fundamental analysis are the two main schools of thought in

the financial markets. As we've mentioned, technical analysis looks at the price

movement of a security and uses this data to predict its future price movements.

Fundamental analysis, on the other hand, looks at economic factors, known as

fundamentals. Let's get into the details of how these two approaches differ, the

criticisms against technical analysis and how technical and fundamental analysis can

be used together to analyze securities.

The Differences

Charts vs. Financial Statements

At the most basic level, a technical analyst approaches a security from the charts,

while a fundamental analyst starts with the financial statements.

By looking at the balance sheet, cash flow statement and income statement, a

fundamental analyst tries to determine a company's value. In financial terms, an

analyst attempts to measure a company's intrinsic value. In this approach, investment

decisions are fairly easy to make - if the price of a stock trades below its intrinsic

value, it's a good investment.

Technical traders, on the other hand, believe there is no reason to analyze a

company's fundamentals because these are all accounted for in the stock's price.

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Technicians believe that all the information they need about a stock can be found in

its charts.

Time Horizon

Fundamental analysis takes a relatively long-term approach to analyzing the market

compared to technical analysis. While technical analysis can be used on a timeframe

of weeks, days or even minutes, fundamental analysis often looks at data over a

number of years.

The different timeframes that these two approaches use is a result of the nature of the

investing style to which they each adhere. It can take a long time for a company's

value to be reflected in the market, so when a fundamental analyst estimates intrinsic

value, a gain is not realized until the stock's market price rises to its "correct" value.

This type of investing is called value investing and assumes that the short-term

market is wrong, but that the price of a particular stock will correct itself over the

long run. This "long run" can represent a timeframe of as long as several years, in

some cases.

Furthermore, the numbers that a fundamentalist analyzes are only released over long

periods of time. Financial statements are filed quarterly and changes in earnings per

share don't emerge on a daily basis like price and volume information. Also

remember that fundamentals are the actual characteristics of a business. New

management can't implement sweeping changes overnight and it takes time to create

new products, marketing campaigns, supply chains, etc. Part of the reason that

fundamental analysts use a long-term timeframe, therefore, is because the data they

use to analyze a stock is generated much more slowly than the price and volume data

used by technical analysts.

Trading Versus Investing:

Not only is technical analysis more short term in nature that fundamental analysis,

but the goals of a purchase (or sale) of a stock are usually different for each

approach. In general, technical analysis is used for a trade, whereas fundamental

17SUN PHARMACEUTICALS INDUSTRIES LIMITED

analysis is used to make an investment. Investors buy assets they believe can increase

in value, while traders buy assets they believe they can sell to somebody else at a

greater price. The line between a trade and an investment can be blurry, but it does

characterize a difference between the two schools.

The Critics

Some critics see technical analysis as a form of black magic. Don't be surprised to

see them question the validity of the discipline to the point where they mock its

supporters. In fact, technical analysis has only recently begun to enjoy some

mainstream credibility. While most analysts on Wall Street focus on the fundamental

side, just about any major brokerage now employs technical analysts as well.

EFFICIENT MARKET THEORY:

Much of the criticism of technical analysis has its roots in academic theory -

specifically the efficient market hypothesis (EMH). This theory says that the market's

price is always the correct one - any past trading information is already reflected in

the price of the stock and, therefore, any analysis to find undervalued securities is

useless. 

There are three versions of EMH. In the first, called weak form efficiency, all past

price information is already included in the current price. According to weak form

efficiency, technical analysis can't predict future movements because all past

information has already been accounted for and, therefore, analyzing the stock's past

price movements will provide no insight into its future movements. In the second,

semi-strong form efficiency, fundamental analysis is also claimed to be of little use in

finding investment opportunities. The third is strong form efficiency, which states

that all information in the market is accounted for in a stock's price and neither

technical nor fundamental analysis can provide investors with an edge. 

There is no right answer as to who is correct. There are arguments to be made on

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both sides and, therefore, it's up to you to do the homework and determine your own

philosophy.

Can They Co-Exist?

Although technical analysis and fundamental analysis are seen by many as polar

opposites - the oil and water of investing - many market participants have

experienced great success by combining the two. For example, some fundamental

analysts use technical analysis techniques to figure out the best time to enter into an

undervalued security. Oftentimes, this situation occurs when the security is severely

oversold. By timing entry into a security, the gains on the investment can be greatly

improved.

Alternatively, some technical traders might look at fundamentals to add strength to a

technical signal. For example, if a sell signal is given through technical patterns and

indicators, a technical trader might look to reaffirm his or her decision by looking at

some key fundamental data. Oftentimes, having both the fundamentals and technicals

on your side can provide the best-case scenario for a trade.

While mixing some of the components of technical and fundamental analysis is not

well received by the most devoted groups in each school, there are certainly benefits

to at least understanding both schools of thought.

Here I have done only fundamental analysis of Sun pharmaceuticals ltd.

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SUN PHARMACEUTICALS INDUSTRIES LIMITED

Company profile:

Sun Pharmaceuticals Industries Ltd. is an international speciality pharma company,

with a presence in 30 markets. Sun Pharma also make active pharmaceutical

ingredients. In branded markets, Sun pharma products are prescribed in chronic

therapy areas like cardiology, psychiatry, neurology, gastroenterology, diabetology

and respiratory.

Sun Pharma came into existence as a startup with just 5 products in 1983. In the time

since, Sun pharma have crossed several milestones to emerge as an important

speciality pharma company with technically complex products in global markets, and

a leading pharma company in India.

In India, Sun Pharma have reached leadership in each of the therapy areas that they

operate in, and are rated among the leading companies by key customers.

Strengthening market share and keeping this customer focus remains a high priority

area for the company.

In the post-1996 years, Sun Pharma have used a combination of internal growth and

acquisitions to drive growth; important mergers were those of the US, Detroit based

Caraco Pharm Labs, ICN Hungary (now called Alkaloida Chemical Company

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Exclusive Group), and that of the internationally approved plants at Halol, India as

well as Bryan, Ohio, US and Cranbury, NJ, US.

Sun Pharma has shifted work related to new molecules and drug delivery systems to

a company, SPARC, which is listed on the Indian stock exchange.

Key Milestones post 1996:

1997 :

Acquisition of Tamil Nadu Dadha Pharmaceuticals Ltd.

1998:

Brand buyout : Brands from Natco Pharma

1999 :

Acquisition of Milmet Labs

2000:

Acquisition of Pradeep Drug Company Ltd

2004 :

Sun Pharma increased stake in Caraco to 66%. By 2007, this stake has reached 75%

on a diluted basis.

The formulation site in Halol, India (the erstwhile MJ Pharma site) received approval

from USFDA, UK MHRA, South African MCC, Brazilian ANVISA and Columbian

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INVIMA

Sun Pharma acquires a Cephalosporin Actives manufacturer, Phlox Pharma, with

European approval for cefuroxime axetil amorphous. By 2007, a formulations facility

to make sterile and non sterile formulations have been built, and the API and non-

sterile sections have been approved by the USFDA.

2005:

Sun Pharma buys a plant in Bryan, Ohio, US and the business of ICN, Hungary from

Valeant Pharma.

Sun Pharma acquires the intellectual property and assets of Able Labs from the US

District Bankruptcy court in New Jersey in December 2005.

Dilip Shanghvi, the CMD, receives the E&Y Entrepreneur of the Year award in

healthcare and life sciences for 2005.

Sun Pharma is selected by Forbes amongst the best 200 companies (sales less than

USD 1 billion) in Asia. This is the fourth time in 5 years that the company has been

selected.

2006:

Announced the demerger of innovative business with pipelines, people, equipment

and funding, into a new company.

2007:

Completed the demerger of the innovative business, with requisite legal and

regulatory approvals. SPARC ltd, the new company, is listed on the stock exchanges

in India, the first pure research company to be so listed.

In May 2007, we, along with our subsidiaries, signed definitive agreements to

acquire Taro Pharmaceutical Industries Ltd., (TAROF, Pink Sheets), a multinational

generic manufacturer with established subsidiaries, manufacturing and products

across the U.S., Israel, Canada for $454 mill. This all-cash deal is subject to Taro

shareholder approval and requisite regulatory clearances

2008:

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In November 2008, Sun Pharma along with subsidiaries, acquired 100% ownership

of Chattem Chemicals, Inc.,a narcotic raw material importer and manufacturer of

controlled substances with a approved facility in Tennessee. This will offer vertical

integration for our controlled substance dosage form business in the US.

Fundamental Analysis:

SHAREHOLDING PATTERN AT SUN PHARHARMACEUTICALS LTD. AS

ON 31ST MARCH, 2009 :

Table -3

Type Of Shareholder %

Of

Shar

es

Promoters and group 63.7

1

Mutual Funds or UTI 3.52

Financial Institutions or banks 2.29

FII 18.1

Corporates/HNIs 5.89

Retail Investors 6.49

Total 100

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Promoters and group

64%

Mutual Funds or UTI4%

Financial Institutions or banks

2%

FII18%

Corporates/HNIs6%

Retail Investors6%

Shareholding Pattern

Gragh: 1

CONSISTANT PERFORMANCE IN DOMESTIC MARKET:

1. Sun Pharma is the sixth largest company in India (in terms of prescription sales)

with a market share of 3.5%. Sun has witnessed a revenue CAGR of 28% over FY05-

FY09, driven by its focus on chronic space, vertical integration and strong doctor

relationships. Sun’s efforts have translated into a top 3 position in over 50% of its

strong 450 brands. Sun is No.1 in key therapeutics like Psychiatry, Neurology,

Cardiology, Ophthalmology, Diabetology and Orthopedics. These segments are not

easy to penetrate.

2. Despite a high base, Sun’s strong performance in the domestic market is likely to

continue, driven by new product launches and volume growth in existing products.

24SUN PHARMACEUTICALS INDUSTRIES LIMITED

Graph 2:

SUN PHARMA PERFORMANCE FROM JUN 04 TO JUN 09 :

Graph 3:

25SUN PHARMACEUTICALS INDUSTRIES LIMITED

SUNPHARMA

0

500

1000

1500

2000

2500

3000

Apr-98

Apr-99

Apr-00

Apr-01

Apr-02

Apr-03

Apr-04

Apr-05

Apr-06

Apr-07

Apr-08

MONTH

ST

OC

K P

RIC

E

Series1

Reason for stock price hike in June 1999 to Jan 2000-

1) The Company has merged its wholly owned export subsidiary Sun Pharma

Exports with itself. Sun Pharma merged its 99.28% subsidiary - Sun

Pharmaceuticals Exports.

2) Sun Pharmaceutical Industries Ltd has approved the merger of the ailing Pradeep

Drug Company Ltd.

3) The company, ranked 5th by domestic prescription product sales, has been

consistently adding to market share from 2.47% in November 2000 to 2.78% in

November 2001 (ORG Retail Chemist Audit, November 2000 and 2001). Forbes

Global, the prestigious international magazine recently rated Sun Pharma among the

best 200 global companies for 2002.

Reason for stock price hike in April 2004

Sun Pharmaceutical Industries purchased additional stake in Caraco enhancing it’s

holding to 63.14%26

SUN PHARMACEUTICALS INDUSTRIES LIMITED

Reason for stock price hike in 2007

1) Sun Pharmaceutical acquires Taro for 4 million

KEY FACTORS IN SUN PHARMA’S PERFORMANCE:

DESPITE CORACO’S SETBACK, US SALES TO GROW FROM SUN’S

OWN FILINGS:

1. Sun’s subsidiary in the US, Caraco’s 33 products was recently seized by the US FDA

for non compliance of cGMP requirements for a sustained period. The US FDA also

mentioned that these products would not be allowed to be distributed in the US till the

time Caraco’s facility comes up to the US FDA standards. The recent action is a

significant setback as the 33 products accounted for a major chunk of Caraco’s own

manufactured products having sales of US$ 112mn in FY09. In addition, Caraco’s 25

ANDAs pending approval would not be considered for approval as well.

2. Despite the setback on Caraco, Sun’s own filings will drive growth for the US

market. Caraco is a facility specializing in oral solids (tablets) while complex

products are from Sun’s facilities in India, which have all clearance from the US

FDA. Sun and Caraco together have 108 ANDAs awaiting approval, of which Sun

alone has 83 ANDAs, including filings from its Cranbury facility. These filings

include products for controlled substances a US$ 6bn opportunity with limited

competition due to the nature of the products. Sun is looking at vertical integration in

this area which would be a key differentiator.

Graph 4:

27SUN PHARMACEUTICALS INDUSTRIES LIMITED

LAUNCH OF TECHNICALLY COMPLEX PRODUCTS HAS ENSURED

CONTINUING CASH FLOW BEYOND THE LIMITED PERIOD:

1. Sun’s forte has been the launch of technically complex products in the US, which not

only generate cash flows during the exclusivity period, but beyond that as well. Sun

has a mix of products, both blockbuster (Pantoprazole-US$ 2.3bn) and small size

products (Ethyol-US$ 80mn), but these have witnessed limited competition due to

the complex nature of products.

2. Generic Ultracet, launched in Dec ’05, is still a market with three other generics apart

from the innovator. Generic Protonix, launched at risk with a 180-day exclusivity,

has generated sales of US$ 340mn, while generic Ethyol launched at risk with 180-

day exclusivity is estimated to have generated US$ 25mn with no generic

competition. Protonix patent expiry is in Dec ’10 while Ethyol’s patent expiry is only

in July ’12.

3. Sun has refiled its ANDA for generic Effexor XR with the US FDA based on

Osmotica’s product. Sun has not been sued by Wyeth and is now awaiting approval

from the US FDA. Sun is confident of generating some revenue from the US$ 2.6bn

opportunity during the exclusivity period starting July ‘10. Effexor XR is not a part

of our estimates

4. While there are no other big opportunities visible currently, we believe that each of

these existing opportunities have the potential to generate sustainable cash flows in

the near future.

28SUN PHARMACEUTICALS INDUSTRIES LIMITED

TARO ACQUISITION STILL PENDING:

Sun has been unable to close the proposed US$ 454mn acquisition of Taro

announced in May 2007. There has been a series of allegations/counter allegations

from both the parties, but the issues remain unresolved. After the failure of both

parties to settle out of court, the verdict will be presented by the Supreme Court of

Israel. Sun had a favourable verdict from the lower court, but it was challenged by

Taro in the Supreme Court. Sun has so far infused US$ 105mn for a 36% stake and

22% voting rights

Table 4:

ACQUIRES ASSETS WITH AN AIM TO GENERATE HIGH ROI

Sun Pharma has historically shown interest in acquiring distressed assets, which

could emerge as a strategic fit or as an entry point in key markets for the company.

Sun’s key acquisition includes Caraco in 1997, which then was loss-making and had

a turnover of US$ 0.8mn. Sun’s technology transfer resulted in a turnaround in

Caraco’s operations in 2003. For FY09, Caraco reported sales of US$ 317mn with a

profitability of US$ 21mn.

Sun’s other strategic acquisition includes a plant in Hungary (Alkaloida Chemicals)

which makes controlled substance APIs for entry into the US$ 6bn controlled

substances market in the US which has significant entry barriers. It later acquired

manufacturing assets of Able Labs for the manufacture of controlled substances from

the US Bankruptcy Court of the District of New Jersey for US$ 23mn.

29SUN PHARMACEUTICALS INDUSTRIES LIMITED

Sun strengthened its position in the controlled substances space by acquiring Chattem

Labs, a narcotic raw material importer and manufacturer of controlled substances

with a facility in Tennessee.

KEY RISKS TO SUN PHARMAEUTICALS:

DELAY IN ANDA approvals for launch in US MARKET:

Since Coraco’s facility faces a warning letter , its 25 pending ANDAs are likely to

be considered for approvals. Sun’s ANDA (83 pending approvals) are therefore

crucial for driving growth in US. If the ANDA approvals are delayed , the economic

benefit may not be realized at its highest potential as the dalay may cause company’s

approval to be behind the competition.

Further negative news flow on Coraco,s US FDA status

As Coraco’s own manufactured products have been seized by US FDA , it wil not

able to distribute these products in the US till the the facility does not meet the US

FDA cGMP requirements. While our US numbers for Sun Pharma are conservative ,

any further negative news from US FDA could have asignificany negative fallout.

AUDITED TARO NUMBERS ARE AT SIGNIFICANT DEVIATION:

Taro is in process of restating its historic financials . Its current financials are baesd

on the management estimates and may change when audited numbers are reported.If

these numbers are at a significant deviation, particularly on the lower side , it may

result in a drag in probability of Sun’s operations.

30SUN PHARMACEUTICALS INDUSTRIES LIMITED

Financial Analysis: Table 5

Profit and Loss Rs. In millions

Particulars Mar 2009 Mar 2008 Mar 2007 Mar 2006 Mar 2005No. of Months 12 12 12 12 12Gross Sales 39254.50 32107.60 23027.50 17429.20 12638.60

Less :Inter divisional transfers

0 0 0 0 0

Less: Sales Returns 0 0 0 0 0Less: Excise 639.00 617.10 568.60 613.70 487.30Net Sales 38615.50 31490.50 22458.90 16815.50 12151.30EXPENDITURE :Increase/Decrease in Stock -286.80 -202.50 -387.00 -572.30 4.50

Raw Materials Consumed 18974.40 15441.20 11993.90 8881.30 5559.40

Power & Fuel Cost 504.40 373.60 310.90 255.50 144.80Employee Cost 1448.40 1202.00 989.20 820.10 827.80Other Manufacturing Expenses

2475.70 1938.50 1991.20 1524.80 620.60

General and Administration Expenses

546.50 886.00 699.50 489.50 646.20

Selling and Distribution Expenses

3052.30 1898.00 1430.50 1207.70 721.30

Miscellaneous Expenses 179.10 146.80 171.00 158.90 380.70Less: Pre-operative Expenses Capitalized

0 0 0 0 0

Total Expenditure 26894.00 21683.60 17199.20 12765.50 8905.30Operating Profit (Excl OI)

11721.50 9806.90 5259.70 4050.00 3246.00

Other Income 1848.90 1326.80 1696.40 1356.40 431.80

Operating Profit 13570.40 11133.70 6956.10 5406.40 3677.80Interest 27.70 50.60 88.00 112.30 114.70PBDT 13542.70 11083.10 6868.10 5294.10 3563.10Depreciation 588.60 561.10 462.70 407.30 328.30Profit Before Taxation & Exceptional Items

12954.10 10522.00 6405.40 4886.80 3234.80

Exceptional Income / Expenses

0 0 0 0 0

Profit Before Tax 12954.10 10522.00 6405.40 4886.80 3234.80Provision for Tax 301.20 381.60 116.10 273.90 177.70

Profits After Tax 12652.90 10140.40 6289.30 4612.90 3057.10Appropriations 23940.80 16848.80 10192.00 7207.40 4964.70

Equity Dividend % 275.00 210.00 135.00 110.00 75.00Earnings Per Share 61.10 48.96 32.52 24.84 16.48

31SUN PHARMACEUTICALS INDUSTRIES LIMITED

Book Value per share 248.72 203.15 126.58 78.80 59.51

Balance sheet : table 6 : Rs. In Million

Particulars Mar 2009 Mar 2008 Mar 2007 Mar 2006 Mar 2005SOURCES OF FUNDSShare Capital 1035.60 1035.60 980.70 942.70 941.60

Total Reserve 50478.60 41040.60 23514.20 13706.70 10112.80

Shareholder's Funds 51514.20 42076.20 24494.90 14649.40 11054.50Secured Loans 236.00 228.80 203.90 182.30 139.20

Unsecured Loans 0 796.40 10477.60 17275.90 18007.30

Total Debts 236.00 1025.20 10681.50 17458.20 18146.50Total Liabilities 51750.20 43101.40 35176.40 32107.60 29201.00APPLICATION OF FUNDS :

Gross Block 10619.00 9350.30 8387.00 7442.60 6120.50

Less: Accumulated Depreciation

3626.40 3049.90 2494.10 2080.70 1729.00

Net Block 6992.60 6300.40 5892.90 5361.90 4391.50

Capital Work in Progress

759.50 334.30 319.10 308.00 479.40

Pre-operative Expenses pending

0 0 0 0 0

Investments 26945.90 18435.70 10574.90 7796.20 9852.40

32SUN PHARMACEUTICALS INDUSTRIES LIMITED

Current Assets, Loans & AdvancesInventories 4867.40 3896.30 3333.80 2634.10 1866.20

Sundry Debtors 6800.30 10554.40 5648.70 2564.70 2349.70

Cash and Bank 12654.70 10724.20 12026.80 12308.20 8900.30Other Current Assets 512.60 257.80 327.00 175.50 45.00Loans and Advances 3286.50 3618.70 3086.80 4890.20 4384.10Total Current Assets 28121.50 29051.40 24423.10 22572.70 17545.30Less : C. L. and ProvisionsCurrent Liabilities 5730.90 7263.10 4863.40 1661.80 1370.10

Provisions 4164.20 2627.90 77.00 1225.00 844.50

Total Current Liabilities 9895.10 9891.00 4940.40 2886.80 2214.60Net Current Assets 18226.40 19160.40 19482.70 19685.90 15330.70Deferred Tax Assets 58.30 64.80 44.40 26.80 26.40

Deferred Tax Liability 1232.50 1194.20 1137.60 1071.20 879.40

Deferred Tax Assets / Liabilities

-1174.20 -1129.40 -1093.20 -1044.40 -853.00

Total Assets 51750.20 43101.40 35176.40 32107.60 29201.00Contingent Liabilities 1022.20 731.50 1113.10 686.80 567.00

Financial Analysis:

Sun Pharma reported 22 % increase on Y-o-Y basis from March 2008 to March

2009.

Company reported increase in PAT by 24.7 % as compared to last year.

Due to increased PAT and no. of shareholders remaining same EPS has increased

by nearly 25 % on Y-o-Y basis from March 2008- March 2009

Company has returned all its unsecured debts thus pushing down debt to equity

ratio in order to able company to access for more debts as and when required

by the company.

33SUN PHARMACEUTICALS INDUSTRIES LIMITED

Size of balance sheet has increased significantly by Rs. 8649 million i.e. 20 %

increase as compared to last year due to increase in reserves.

Company’s debtors have decreased as compared to last year denoting better

administration and debtor collection by company even in recessionary situations.

Cash Flow Statement:

Table 7 (Rs.in Millions)

Particulars Mar 2009 Mar 2008 Mar 2007 Mar 2006 Mar 2005Profit Before Tax 12954.00 10522.00 6405.40 4886.80 3234.80Adjustment -1413.50 -197.10 -969.20 -590.30 233.20

Changes In working Capital 1075.50 -3612.00 -776.00 -1034.70 -1170.80

Cash Flow after changes in Working Capital

12616.00 6712.90 4660.20 3261.80 2297.20

Cash Flow from Operating Activites 12624.90 6261.30 4505.60 3108.30 2198.1034

SUN PHARMACEUTICALS INDUSTRIES LIMITED

Cash Flow from Investing Activities -6603.70 -7434.90 -1125.80 1607.60 -8634.40

Cash Flow from Financing Activites -3256.70 -60.60 -3604.80 -1308.00 14578.90

Net Cash Inflow / Outflow 2764.50 -1234.20 -225.00 3407.90 8142.60Opening Cash & Cash Equivalents 9773.10 12084.80 12309.80 8900.30 757.50Cash & Cash Equivalent on Amalgamation / Take over / Merger

0 0 0 0 0.20

Cash & Cash Equivalent of Subsidiaries under liquidations

0 0 0 0 0

Effect of Foreign Exchange Fluctuations

0 0 0 0 0

Closing Cash & Cash Equivalent 12537.60 10850.60 12084.80 12308.20 8900.30

Cash flow from operating activities has increased significantly amounting double

as compared to last year indicates higher operational efficiency and increased

operating activities to generate higher returns for company.

Cash flow from investing activities shows outflow of funds indicating that

company has invested in different investment avenues as valuations were

downgraded during the year because of global recessionary conditions.

Financial activities showing significant cash outflow as company has repaid all its

unsecured loans becoming debt free company.

35SUN PHARMACEUTICALS INDUSTRIES LIMITED

KEY FINDINGS

36SUN PHARMACEUTICALS INDUSTRIES LIMITED

Ratio: Table 8: Rs. In Millions

Particulars Mar 2009 Mar 2008 Mar 2007 Mar 2006 Mar 2005

Operational & Financial Ratios

Earnings Per Share (Rs) 61.10 48.96 32.52 24.84 16.48

DPS(Rs) 13.75 10.50 6.75 5.50 3.75

Book NAV/Share(Rs) 248.72 203.15 126.58 78.80 59.51

PER(x) 18.21 25.15 32.41 34.88 28.60

Performance Ratios

ROA (%) 24.45 23.53 17.88 14.37 10.47

ROE (%) 24.56 24.10 25.68 31.49 27.66

ROCE (%) 25.09 24.53 18.46 15.57 11.47

Asset Turnover(x) 1.21 1.22 1.46 1.76 1.62

Sales/Fixed Asset(x) 3.93 3.62 2.91 2.57 2.25

Working Capital/Sales(x) 0.46 0.60 0.85 1.13 1.21

Efficiency Ratios

Fixed Capital/Sales(x) 25.44 27.62 34.37 38.91 44.39

Receivable days 80.68 92.10 65.09 51.46 52.47

Inventory Days 40.74 41.10 47.30 47.12 50.26

Payable days 75.91 88.03 48.44 20.30 31.92

Growth Ratio

Net Sales Growth (%) 22.63 40.21 33.56 38.38 28.64

Core EBITDA Growth (%) 21.89 60.06 28.66 47.00 14.51

EBIT Growth (%) 22.79 62.82 29.89 49.25 12.54

PAT Growth (%) 24.78 61.23 36.34 50.89 17.87

EPS Growth(%) 24.80 50.55 30.92 50.73 -41.06

Financial Stability Ratios

Total Debt/Equity(x) 0.00 0.02 0.44 1.19 1.64

Current Ratio(x) 4.91 4.00 5.02 13.58 12.81

Quick Ratio(x) 4.06 3.46 4.34 12.00 11.44

Interest Cover(x) 468.66 208.94 73.79 44.52 29.20

Total Debt/Mcap(x) 0.00 0.00 0.05 0.11 0.21

Analysis of Key Ratios:

Current Ratio: This ratio is to ascertain whether a company's short-term

assets (cash, cash equivalents, marketable securities, receivables and inventory) are

readily available to pay off its short-term liabilities (notes payable, current

portion of term debt, payables, accrued expenses and taxes). In theory, the

higher the current ratio, the better is the Company.

In this case, the ratio has increased from 4.0 to 4.99. This is due to increase in current

liability.

Quick Ratio

(Cash + AR) / Total Current Liabilities

This is a slightly more conservative measure of liquidity because it uses only

your available cash and accounts receivable in the equation.Also called Acid-Test

Ratio, this is very similar to your current ratio but it includes only those current

assets that can be most readily used to pay bills today: cash and accounts receivable.

The quick ratio excludes inventory, which must first be sold and the cash

collected before it can be used to pay liabilities. It also excludes current assets like

prepaid expenses, which are never converted to cash. They are simply assets you paid

for in advance.

In general, company should try to maintain a quick ratio of 1 to 1, which means you

have $1 worth of cash and accounts receivable for every $1 dollar

of total current liabilities.

In this case, the ratio has increased from 3.46 to 4.06 This is due to increase in

current liability.

Debt / Equity Ratio: Debt equity ratio has become zero as company has paid off all

the debts. It was 0.02% last year.

Interest Coverage Ratio: Interest Coverage Ratio also shows an upward trend. It

has increased from 208% to 468% during the period from 2008 to 2009. This

37SUN PHARMACEUTICALS INDUSTRIES LIMITED

is a healthy indicator and evidently illustrates that company will be able to pay

interest which is very miniscule on the secured borrowings very easily even if profits

do not grow at the expected rate.

Working Capital Cycle

Receivable Days:

Days in Period (usually 365) / Sales/Receivables Ratio

Average time in days that your receivables are outstanding. Measures your

control of your credit and collections. Greater the days, greater probability for

delinquencies.

Receivable days are decreased from 92 days to 80 days, shows increasing control

over credit and collections by company.

Payable days:

Days in Period (usually 365) / Sales/Payables Ratio

Average time in days that your Payables are outstanding. Measures your

credibility with suppliers.

Inventory Days:

Days in period (91) / COGS / Inventory Ratio

Average length of time units are in inventory.

EPS (Earnings per Share): Earnings per share are generally considered to be

the single most important variable in determining a share's price. It is also a

major component of the price-to-earnings valuation ratio. Earnings per Share have

increased from Rs. 48.96 Per share to Rs.61.10 per share from 2008 to 2009. Due

to higher Profit after tax and strong future trends I feel the EPS will surely continue

to increase.

ROE (Return on Equity Capital): The return on equity measures the profitability

of equity funds invested in the firm. It is regarded as a very important measure

because it reflects the productivity of the ownership.

38SUN PHARMACEUTICALS INDUSTRIES LIMITED

The return on shareholder’s equity is quite good as it has increased from 24.1% to

24.56 % and it shows an upward trend, this has increased due to increase in

the Profits.

ROCE (Return on Capital Employed): ROCE should always be higher than

the rate at which the company borrows; otherwise any increase in borrowing will

reduce shareholders' earnings. It has increased from 24.53% to 25.09 % this shows

that capital employed is optimally used.

P/E (Price Earnings ratio): In general, a stock with a high P/E ratio

suggests that investors are expecting higher earnings growth in the future compared

to the overall market, as investors are paying more for today's earnings in

anticipation of future earnings growth. Hence, as a generalization, stocks with

this characteristic are considered to be growth stocks. Conversely, a stock with a

low P/E ratio suggests that investors have more modest expectations for its future

growth compared to the market as a whole.

Assets Turnover

Net Sales / Net Assets

This ratio measures your productive use of your fixed assets—the amount of

sales generated for every dollar’s worth of assets. It is calculated by dividing

sales in dollars by assets in dollars. Asset turnover measures your company’s

efficiency at using its assets in generating sales or revenue; the higher the number the

better. It also indicates pricing strategy: companies with low profit margins tend to

have high asset turnover; those with high profit margins have low asset

turnover. Largely depreciated fixed assets or a labor-intensive operation may distort

this ratio

39SUN PHARMACEUTICALS INDUSTRIES LIMITED

KEY FINDINGS AT SUN PHARMACEUTICALS:

Sustainable competitive advantage: Most linear cost structure in the industry,

strong product filings in key markets, which includes a range of complex products.

Financial structure : Sun Pharma is a debt-free company

Earnings visibility : Likely to improve as more limited competition products are

launched and Caraco’s warning letter status is withdrawn by the US FDA.

Future event triggers: Launch of limited competition products in the US and

withdrawal of Caraco’s warning letter by the US FDA

Expected price momentum: Stock could remain weak in the near term till the time

clarity emerges on resumption of Caraco operations

40SUN PHARMACEUTICALS INDUSTRIES LIMITED

OBSERVATION OF THE STUDY

From the Above analysis it is viable to hold the shares of Sun Pharmaceuticals

Industries Ltd for Short-run. If planning for Long-run you can buy the shares.

Consistency in domestic market share to be maintained. Sun continues to gain

market share in domestic market through new launches and and strong doctor

coverage despite having a high base and non recurring sales in Q4FY09

Difficult to manufacture generics ensure generics ensure continuing cash flows

beyond the limited period: sun has been able to identify products which are difficult

to manufacture and enjoy limited competition for a significant period after the

exclusivity has got over. Generic Protonix and Ethyol are two such products

currently in the market while the sun waiting approval for generic Effexor XR, a US$

2.6 bn opportunity with two competing players.

However there are three main obstacles in the way of Successful analysis:

inadequacies

or incorrectness of data, future uncertainties, and irrational market behavior.

This may prove my analysis wrong.

41SUN PHARMACEUTICALS INDUSTRIES LIMITED

ABBREVIATION

PPP- Purchasing Power Parity.

GDP- Gross Domestic Product.

NCE- New Chemical Entity.

FDA- Foods and Drugs Administration.

ANDA- Abbreviated New Drug Application.

NDDS- Novel Drug Delivery System.

DMF- Drug Master File.

DPCO- Drug Price Control Order.

CRAMS- Contract Manufacturing and Research

CRO- Clinical Research Outsourcing.

OTC- Over the Counter.

NPPA- National Pharmaceutical Pricing Authority.

R&D- Research and Development.

NDDR- New Drug Discovery Research.

42SUN PHARMACEUTICALS INDUSTRIES LIMITED

BIBLIOGHRAPHY

Book:

Title: Investment Analysis and Portfolio Management

Author: Prasanna Chandra

Publisher: Tata McGraw Hill Publication. (2ndedition)

Magazines/Journals:

Title: Indian Industry – A Monthly Review

Date of issue: June, 2009

Publisher: ICFAI University Press

Websites:

www.sunpharmaceuticals.com

www.myiris.com

www.equitymaster.com

www.jgsfinancial.com

www.investopedia.com

www.businessworld.com

www.rbi.org.in

www.nseindia.com

www.ibef.org

www.businessstandard.com

www.timesofindia.com

43SUN PHARMACEUTICALS INDUSTRIES LIMITED