About The Company
One of the most reputed brand of India in the pharma sector and have been fairly fancied among the traders as well as the investors in the capital markets.
About The Results
A look at the performance of the company for the year ended 31st March 2009 gives no indication of the pain it has gone through in the last quarter of FY09. For the full year, net sales of the company rose 27% at Rs.4272.30 crore while net profit rose by 22% at Rs.1817.73 crore.
But for Q4FY09, sales was down 10% while net profit was down by a whopping 45%. This was on account of the 46% drop in exports it had during the last quarter. This was on account of the US markets where its product – Caraco had to be recalled. Sun Pharma holds 76 per cent equity in Caraco. The USFDA had sent Caraco, which has a 76% stake, a warning letter in November 08’, regarding the quality control. After this, Caraco products had to be recalled. But this one product has not affected it business in USA as later on too, it has gone on to receive approvals for other drugs.
Sun Pharma and all its subsidiaries, abbreviated new drug applications for 71 products have been approved compared with 53 at the end of 2008. The controversy with Israeli drug maker, Taro continues to rage and at the end of all this, it is estimated that Sun Pharma may have to shell out up to Rs 1,000 crore this fiscal for acquiring Taro Pharma if it manages to get all the shares, including the promoters shares. But without promoters' shareholdings, it could cost anywhere between Rs 200 crore. Sun Pharma and Taro had entered into a USD 454-million merger agreement in May 2007 which was unilaterally terminated by Taro alleging under valuation.
Despite this, Sun’s biggest plus point is that it makes a wide basket of generic specialty drugs at very economical costs. In India, Sun Pharma currently has a 3.3% share and has a niche for itself in brands catering to therapy areas of psychiatry (Repace), neurology (Oxetol), cardiology (Aztor) and gastroenterology (Pantocid) amongst the others.
Exports account for 50% of Sun’s sales and with rupee gaining more strength, this could dent the earnings.Any fresh investment would not be fruitful at this point of time.
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