Sun Pharmaceuticals Industries is working in manufacturing, developing, and spreading a large range of branded and generic formulations and Active Pharmaceutical Ingredients (APIs).
Sun Pharma is also India’s largest and pharmaceutical company. Its global presence is supported by several manufacturing facilities across a few continents. In the US market which contributes a significant share of its revenues, the company is the leader in the generic dermatology segment.
Healthcare Sector
Large Capital of ₹1,90,747 Cr
Sun Pharmaceutical Industries was established back in the year 1983 with five psychiatry products and a two-person marketing team.
Sun Pharma is one of the largest specialty generic pharmaceutical companies in the world. It provides high-quality, affordable medicines trusted by healthcare professionals and patients in many countries worldwide.
It has strong capabilities in developing generic and complex products with a robust pipeline of many ANDAs, including high-value First-to-File (FTF) opportunities.
It has an established presence in Europe and key high-growth Emerging Markets (EM) like Russia, Romania, South Africa, Brazil, and Malaysia.
The company’s primary focus is to in-license generic and differentiated generic products that are close to commercialization or in an advanced stage of development for North America, Western Europe, and Japan markets.
The company is the market leader in India and it is interested in partnerships for late-stage and/or marketed opportunities complementary to its commercial footprint or expansion within its core areas of focus in India.
These include CNS disorders, Cardiology, Diabetes, and Metabolic disorders, Gastroenterology, Ophthalmology, Oncology, Pain, Rheumatology, Allergy, Asthma and Inflammation, and Gynecology.
Its focus is for NCEs, NBEs, NDDS based differentiated products, Biosimilars, Proprietary Technology Barrier Products which provide it the first-mover advantage in India. The company’s leadership position in India allows it to offer significant value to innovator companies who want to partner with a dynamic and leading company, are capable of successfully marketing its assets, and are willing to give the right priority to in-licensed or partnered projects.
The business area of the company
The company is among the largest specialty generic pharmaceutical company and India’s top pharmaceutical companies. A vertically integrated business and a skilled team enable it to deliver high-quality products, trusted by customers and patients in many countries across the world, at affordable prices.
Products
- Formulations
- Active Pharmaceutical Ingredients – Crams
- OTC
Sun Pharma Today
 | Healthcare |
 | Drug Manufacturers—Specialty & Generic |
 | Sun House, Mumbai, India |
 | India |
 | 91 22 4324 4324 |
 | http://www.sunpharma.com |
Sun Pharma Chart
Sun Pharma Index presence
| NIFTY100WEIGHT | NIFTYEQWGT | NIFTY100 | NIFTY | NIFTY500 | NIFTYPHARMA | NIFTYLGEMID250 |
| NIFTY200 | NV20 | LIQ15 | SENSEX | BSE HC | BSE500 | SNSX50 |
| BSE100 | BSE200 | LMI250 | ALLLCAP | LRGCAP | BSE100LARGECAPTMC | GREENEX |
| CARBONEX | MFG | S&PDIVSTABLE | ESG100 | SHA500 | S&PLARGEMIDCAP |
Sun Pharma Infographics
Overview of Sun Pharma
| PE Ratio | Sector PE | PB Ratio | Sector PB | Dividend Yield | Sector Div Yld |
| 65.69 | 38.29 | 3.86 | 5.11 | 0.94% | 0.68% |
- Current price of share is lower then intrinsic value.
- This stock offered good return as compared to fixed-deposit.
- Low dividend returns in past.
- This stock is not in ASM/GSM list.
Read more about PE ratio with infographics | Read more about dividend and dividend yield with infographics
Financials of Sun Pharma
Income Statement Table
| Financial Year | FY 2018 | FY 2019 | FY 2020 | FY 2021 |
| Total Revenue | 27,328.22 | 30,091.40 | 33,489.09 | 34,357.31 |
| EBITDA | 5,496.39 | 6,118.70 | 7,365.10 | 5,020.75 |
| PBIT | 3,996.55 | 4,365.45 | 5,312.32 | 2,940.80 |
| PBT | 3,478.98 | 3,810.20 | 5,009.59 | 2,799.37 |
| Net Income | 2,095.70 | 2,665.42 | 3,764.93 | 2,903.82 |
| EPS | 8.73 | 11.11 | 15.69 | 12.1 |
| DPS | 2 | 2.75 | 4 | 7.5 |
| Payout ratio | 0.23 | 0.25 | 0.25 | 0.62 |
Income Statement
Lower than Industry Revenue Growth
Over the last 5 years, revenue has grown at a yearly rate of 3.35%, vs industry avg of 6.96%
Lower than Industry Net Income
Over the last 5 years, net income has grown at a yearly rate of -8.57%, vs industry avg of 7.95%
Decreasing Market Share
Over the last 5 years, market share decreased from 15.92% to 13.37%
Balance Sheet Table
| Financial Year | FY 2018 | FY 2019 | FY 2020 | FY 2021 |
| Current Assets | 31,635.90 | 31,069.19 | 31,654.16 | 30,442.08 |
| Non-Current Assets | 32,661.49 | 33,520.34 | 36,540.16 | 37,180.14 |
| Total Assets | 64,297.39 | 64,589.53 | 68,194.32 | 67,622.22 |
| Current Liabilities | 19,864.32 | 17,339.62 | 15,706.43 | 16,145.63 |
| Non-Current Liabilities | 2,234.80 | 2,527.31 | 3,363.20 | 1,996.76 |
| Total Liabilities | 22,099.12 | 19,866.93 | 19,069.63 | 18,142.39 |
| Total Equity | 42,198.27 | 44,722.60 | 49,124.69 | 49,479.83 |
| Total Liabilities & Shareholder’s Equity | 64,297.39 | 64,589.53 | 68,194.32 | 67,622.22 |
| Total Common Shares Outstanding | 239.93 | 239.93 | 239.93 | 239.93 |
Balance Sheet
Lower than Industry Debt to Equity Ratio
Over the last 5 years, the debt to equity ratio has been 19.44%, vs industry avg of 39.7%
Higher than Industry Current Ratio
Over the last 5 years, the current ratio has been 182.55%, vs industry avg of 165.24%
Cash Flow Statement Table
| Financial Year | FY 2018 | FY 2019 | FY 2020 | FY 2021 |
| Net Change in Cash | -735.91 | -844.15 | -1,385.69 | 596.42 |
| Changes in Working Capital | -954.05 | -3,582.41 | -447.36 | 1,561.15 |
| Capital Expenditures | 1,960.78 | 3,212.82 | 1,542.00 | 1,170.13 |
| Free Cash Flow | 1,946.37 | -1,016.37 | 5,012.77 | 5,000.24 |
Cash Flow Statement
Lower than Industry Free Cash Flow Growth
Over the last 5 years, free cash flow growth has been 8.78%, vs an industry avg of 36.96%
Peers of Sun Pharma
| Stock | PE Ratio | PB Ratio | Dividend Yield |
| Sun Pharmaceutical Industries Ltd | 65.69 | 3.86 | 0.94% |
| Dr. Reddy’s Laboratories Ltd | 39.61 | 4.38 | 0.54% |
| Cipla Ltd | 30.36 | 3.93 | 0.55% |
| Gland Pharma Ltd | 60.98 | 10.3 | — |
- Sun Pharma gave more than 65 price to earnings ratio than its peers
- This share gave fair dividend yield as compare to peers.
Read more about PE ratio with infographics and Dividend infographics
Promoter Holdings Trend
Total Promoter Holding
In last 6 months, promoter holding in the company has almost stayed constant
Low Pledged Promoter Holding
Pledged promoter holdings are insignificant
Institutional Holdings Trend
Mutual Fund Holding
In the last 3 months, the mutual fund holding of the company has almost stayed constant
Foreign Institutional Holding
In the last 3 months, foreign institutional holding of the company has almost stayed constant
| Investors | Dec-18 | Mar-19 | Jun-19 | Sep-19 | Dec-19 | Mar-20 | Jun-20 | Sep-20 | Dec-20 | Mar-21 | Jun-21 | Sep-21 |
| Promoters | 54.38 | 54.38 | 54.38 | 54.55 | 54.56 | 54.69 | 54.69 | 54.69 | 54.48 | 54.48 | 54.48 | 54.48 |
| FIIs | 14.88 | 15.54 | 14.93 | 14.7 | 13.89 | 12.81 | 12.7 | 12.38 | 12.19 | 11.67 | 11.5 | 12.07 |
| DIIs | 17.65 | 17.32 | 17.98 | 18.53 | 19.07 | 19.56 | 20.11 | 20.45 | 20.84 | 21.62 | 21.97 | 21.73 |
| Public | 13.09 | 12.76 | 12.71 | 12.23 | 12.48 | 12.94 | 12.51 | 12.48 | 12.49 | 12.23 | 12.05 | 11.72 |
Dividend and Split
Dividend Table
| Cash Dividend | Dividend/Share | Ex Date |
| Final | ₹2.00 | 23-Aug-21 |
| Cash Dividend | Dividend/Share | Ex Date |
| Interim | ₹5.50 | 9-Feb-21 |
| Cash Dividend | Dividend/Share | Ex Date |
| Final | ₹1.00 | 19-Aug-20 |
| Cash Dividend | Dividend/Share | Ex Date |
| Interim | ₹3.00 | 17-Feb-20 |
| Cash Dividend | Dividend/Share | Ex Date |
| Final | ₹2.75 | 20-Aug-19 |
Read more about dividend and dividend yield with infographics
| Buyback | Ratio | Ex Date |
| Tender Offer | — | 14-Jul-16 |
| Share Split | Ratio | Ex Date |
| Face Value Change from 5 To 1 | 1:05 | 25-Nov-10 |
Know more about Stock split in company with infographics
Strength and Limitations
Strength
- The company has shown a good profit growth of 91.30% for the Past 3 years.
- Company has a healthy Interest coverage ratio of 9.38.
Limitations
- The company has shown a poor revenue growth of 12.54% for the Past 3 years.
- Tax rate is low at 0.61.
- The company is trading at a high PE of 96.09.
- The company is trading at a high EV/EBITDA of 66.35.
Expert Forecast
The stock forecast of Sun Pharma stock for the year 2022
HIGH
Rs.1031
MEDIAN
Rs.911
LOW
Rs.582
Future stock price targets of Sun Pharma stock
| Target of Sun pharma | Future Stock Price |
| 2022 | 880 to 1000 |
| 2025 | 1100 to 1150 |
| 2030 | 1600 to 1650 |
| 2035 | 2400 to 2450 |
| 2040 | 3800 to 3900 |
Please Note
All the views and contents mentioned in this blog are merely for educational purposes and are not recommendations or tips offered to any person(s) with respect to the purchase or sale of the stocks / futures. I do not accept any liability/loss accruing from the use of any content from this blog. All readers of this blog must rely on their own discretion and neither any analyst nor any publisher shall be responsible for the outcome.
Stock Forecast Predictions
With the calculations on the basis of CAGR, the long-term investment in Sun Pharma comes very amazing numbers. Look at the table below
| Long term Prediction of SBIN Stock | 10 Stocks worth Rs.81100 |
| 1 Year | Rs.90,070 |
| 5 Years | Rs.1,37,028 |
| 10 Years | Rs.2,31,525 |
| 15 Years | Rs.3,91,188 |
| 20 Years | Rs.6,60,959 |
| 25 Years | Rs.11,16,767 |
Read How Rs.10,000 converted into 1770 Crores Wipro case study?
Conclusion
Sun Pharma is India’s largest and pharmaceutical company. Its global presence is supported by several manufacturing facilities across a few continents. In the US market which contributes a significant share of its revenues, the company is the leader in the generic dermatology segment.
During the Covid-19 period, this stock crashed many record highs and is now in a settled position.
Once India used to import more than 90% of medicines but today its medicinal import reached 10%.
After our successful Covid-19 vaccination drive of 100 crores, it is clearly seen that in next future pharmaceutical industry will be the biggest in the world.
Let’s look at the ratio of Sun Pharma
| PE Ratio | Sector PE | PB Ratio | Sector PB | Dividend Yield | Sector Div Yld |
| 65.69 | 38.29 | 3.86 | 5.11 | 0.94% | 0.68% |
Check Sun Pharma on NSE website
Frequently Asked Questions
Ans: Sun Pharmaceuticals Industries is famous for manufacturing, developing, and spreading a large range of branded and generic formulations and Active Pharmaceutical Ingredients (APIs). Sun Pharma is one of the largest specialty generic pharmaceutical companies in the world. It provides high-quality, affordable medicines trusted by healthcare professionals and patients in many countries worldwide
Ans: Yes, Sun Pharma is one of the largest specialty generic pharmaceutical companies in the world. It provides high-quality, affordable medicines trusted by healthcare professionals and patients in many countries worldwide.
Ans: Dilip Shanghvi is the founder of Sun Pharmaceutical Industries Ltd. and has extensive industrial experience in the pharmaceutical industry.
Ans: Sun Pharmaceutical Industries Limited (d/b/a Sun Pharma) is an Indian 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.
Ans: SUN PHARMA is overvalued based on its PB Ratio (4.2x) compared to the IN Pharmaceuticals industry average (3x).
Ans: The target price of Sun Pharma shares in 2022 should be more than 1000.
Ans: The target price of Sun Pharma shares in 2022 should be more than 1100.
