2014
Fundamental and Technical Analysis of Sun Pharmaceuticals
Shardul Chimote itm-khr
Fundamental and Technical Analysis of Sun Pharmaceuticals About Sun Pharmaceuticals Sun Pharmaceutical Industries Limited (NSE: SUNPHARMA, BSE: 524715) is an multinational pharmaceutical company headquartered in Mumbai, Maharashtra that manufactures and sells pharmaceutical formulations and active pharmaceutical ingredients (APIs) primarily in India and the United States. The company offers formulations in various therapeutic areas, such as cardiology, psychiatry, neurology, gastroenterology anddiabetology. It also provides APIs such as warfarin, carbamazepine, etodolac, and clorazepate, as well as anticancers, steroids, peptides, sex hormones, and controlled substances.
Sun Pharmaceuticals was established by Mr. Dilip Shanghvi in 1983 in Kolkata with five products to treat psychiatry ailments. Cardiology products were introduced in 1987 followed by gastroenterology products in 1989. Today it is the largest chronic prescription company in India and a market leader in psychiatry, neurology, cardiology, orthopedics, ophthalmology, gastroenterology and nephrology. Some of the top brands of the company include pantocid, susten, aztor, gemer, repace, glucored, strocit, clopilet and cardivas. Over 57% of Sun Pharma sales are from markets outside India, primarily in the US. Manufacturing is across 23 locations, including the US, Canada, Brazil, Mexico and Israel. In the US, the company markets over 200 generics,
with
another
150
awaiting
approval
from
the
U.S. Food
and
Drug
Administration (FDA). Sun Pharma was listed on the stock exchange in 1994 in an issue oversubscribed 55 times. The founding family continues to hold a majority stake in the company. Today Sun Pharma is the third largest and the most profitable pharmaceutical company in India as well as the largest pharmaceutical company by market capitalisation on the Indian exchanges. The Indian pharmaceutical industry has become the third largest producer in the world in terms of volumes and is poised to grow into an industry of $20 billion in 2015 from the current turnover of $12 billion. In terms of value India still stands at number 14 in the world.
Share holding pattern
Share holding pattern as on :
31/12/2013
Face value No. Shares
Of % Holding
No. Shares
1 Of % Holding
30/09/2013
1 No. Shares
16/08/2013
1 Of % Holding
Promoter's holding
Indian Promoters
1318341400 63.65
1318341400 63.65
1318341400 63.65
Sub total
1318341400
63.65
1318341400
63.65
1318341400
Banks Fin. Inst. and Insurance 92256360 FII's 465899152
4.45 22.49
39767327 471782863
1.92 22.78
36240553 474131535
Sub total
583873599
28.19
536967294
25.93
537206784
25.94
51087269
2.47
100472432
4.85
100761965
4.86
3033514
0.15
2938247
0.14
2980703
0.14
Direcctors/Employees 4869850 Govt 892512 Others 2511511
0.24 0.04 0.12
4869850 525971 2929047
0.24 0.03 0.14
4869850 485496 2079467
0.24 0.02 0.1
Sub total
62394656
3.01
111735547
5.39
111177481
5.37
General public
106554255
5.14
104089669
5.03
104406645
Grand total
2071163910
100
2071133910
100
2071132310
63.65
Non promoter's holding
Institutional investors
1.75 22.89
Other investors Private Bodies
Corporate
NRI's/OCB's/Foreign Others
5.04 100
Interpretation from above data:-
1. Promoter holding, as seen is at 63.65%, which is greater than 50%. Hence the company is stable. 2. It is also evident from the above data that the chances of Sun Pharma being acquired by other company is very less as the promoter holding stands at 63.65%.
The following graph gives the share of promoter, non promoter and other investors in share holding pattern. 1400000000
1200000000
1000000000
800000000
PROMOTER NON PROMOTER
600000000
OTHER INVESTORS 400000000
200000000
0 JULY. 2013
SEPT. 2013
DEC. 2013
Mutual Fund holdings
DEC
18,733,838
SEPT
JUNE
MAR
21,721,660
11,170,354
22,743,106
MUTUAL FUND HOLDING 25,000,000 20,000,000 15,000,000 10,000,000
MUTUAL FUND HOLDING
5,000,000 0
Interpretation from above data:-
As seen from above graph mutual fund holding is quite stable, hence the mutual fund is bullish about this company.
Public Share Holdings
No. Name of the Shareholder
Total held
Shares Shares as % of Total No. of Shares
1
Genesis Indian Investment Company Ltd 49,027,465 General Sub Fund
2.37
2
Lakshdeep Investments & Finance Pvt Ltd
22,226,000
1.07
3
Life Insurance Corporation of India
21,264,429
1.03
Total
92,517,894
4.47
The average public share holding is greater than 1 %.
SHARES AS % OF TOTAL NO. OF SHARES GENESIS INDIA INVESTMENT COMPANY
LAKSHADWEEP INVESTMENTS
23%
53% 24%
Industry Analysis
LIC OF INDIA
SWOT Analysis for pharmaceuticals sector in India
Fundamental Analysis of Sun Pharma
Beta
0.539
Confidence in Beta
1.08%
Diluted Trailing Twelve Months (TTM) Earnings Per Share (EPS)
Rs.12.42
TTM Price-to-Earnings (P/E) Ratio
49.3
Relative Strength Index
According to relative strength index, Sun pharma is at its support.
Sun pharma simple moving average
Sun pharma exponential moving average
Moving average convergence and divergence
Sun pharma Bollinger bands
Financial Ratios Mar '12
Mar '11
Mar '10
Mar '09
Face Value
1.00
1.00
1.00
5.00
5.00
Dividend Per Share
--
--
--
--
--
Operating Profit Per Share (Rs)
47.28 30.94
19.04
56.55
90.02
Net Operating Profit Per Share (Rs)
109.12 77.44
55.25
188.46
206.62
Free Reserves Per Share (Rs)
--
87.66
356.10
306.91
Bonus in Equity Capital
78.03 78.03
78.03
78.03
78.03
43.33 39.95
34.27
30.00
43.56
Profit Before Interest And Tax Margin(%) 39.01 34.30
28.90
23.83
38.97
Gross Profit Margin(%)
40.35 36.32
30.69
26.07
40.68
Cash Profit Margin(%)
37.60 39.27
34.77
34.27
44.21
Adjusted Cash Margin(%)
37.60 39.27
34.02
34.27
44.21
Net Profit Margin(%)
25.52 31.28
30.43
31.64
40.69
Adjusted Net Profit Margin(%)
25.52 31.28
29.85
31.64
40.69
Return On Capital Employed(%)
32.57 27.07
21.45
17.30
26.69
Return On Net Worth(%)
19.90 21.71
19.15
17.25
25.80
Adjusted Return on Net Worth(%)
27.08 24.87
19.25
16.73
26.28
Return on Assets Excluding Revaluations
144.75 118.15
91.57
378.00
340.14
Mar '13
Investment Valuation Ratios
--
Profitability Ratios
Operating Profit Margin(%)
Return on Assets Including Revaluations
144.75 118.15
91.57
378.00
340.14
Return on Long Term Funds(%)
32.75 27.31
20.77
17.57
27.29
Current Ratio
2.91
3.32
3.33
3.55
4.30
Quick Ratio
2.16
2.56
2.91
3.00
3.91
Debt Equity Ratio
0.01
0.02
0.04
0.02
0.03
Long Term Debt Equity Ratio
0.01
0.01
0.02
0.01
--
Liquidity And Solvency Ratios
Debt Coverage Ratios
Interest Cover
114.65 120.02
28.60
225.07
329.67
Total Debt to Owners Fund
0.01
0.04
0.02
0.03
Financial Charges Coverage Ratio
122.44 130.35
38.39
250.00
350.75
Financial Charges Coverage Ratio Post Tax 77.91 105.53
35.99
245.62
332.80
0.02
Management Efficiency Ratios
Inventory Turnover Ratio
4.38
3.84
3.85
4.00
4.79
Debtors Turnover Ratio
4.87
4.97
4.93
3.80
3.72
Investments Turnover Ratio
4.38
3.84
4.37
4.00
4.79
Fixed Assets Turnover Ratio
2.02
1.72
1.46
1.87
2.24
Total Assets Turnover Ratio
0.79
0.65
0.59
0.51
0.62
Asset Turnover Ratio
0.74
0.66
0.60
1.87
2.24
Average Raw Material Holding
--
--
172.34
204.47
195.22
Average Finished Goods Held
--
--
40.90
23.86
24.40
Number of Days In Working Capital
239.40 296.45
312.02
280.68
304.22
Profit & Loss Account Ratios
Material Cost Composition
22.86 28.31
25.96
30.35
23.41
Imported Composition of Raw Materials -Consumed
--
--
--
--
Selling Distribution Cost Composition
--
--
8.28
7.99
7.43
Expenses as Composition of Total Sales
--
--
--
--
--
Cash Flow Indicator Ratios
Dividend Payout Ratio Net Profit
20.30 19.25
23.19
24.57
18.33
Dividend Payout Ratio Cash Profit
18.25 17.35
20.85
22.07
17.16
Earning Retention Ratio
85.08 83.20
76.94
74.66
82.01
Cash Earning Retention Ratio
86.22 84.66
79.26
77.31
83.13
AdjustedCash Flow Times
0.05
0.21
0.12
0.09
0.08
------ END------
