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Preeminent play in pharma space
Sun Pharma has one of the fastest growing and most resilient
businesses among Indian generics players. The company has
historically focused on the domestic and US markets, but lately it has
started generating significant revenues in other geographies as well
(International market constituted 60% of FY11 sales). The company
has consistently delivered growth and has proven its expertise in
driving operational efficiencies to extract margins that are
significantly higher than competitors (~34% v/s industry margin of
~22%)
One of the best franchises in domestic market
Company’s domestic business comprises mainly of high margin and
high growth therapeutic areas like CVs, Neurology and diabetology
(chronic segment). The brand franchise of the drugs in chronic
segments, once established, is durable. Industry surveys indicate
high level of brand recognition for Sun Pharma’s products among
doctors. Sun Pharma’s prudent brand building strategy is evident
from its top 10 selling brands that constitute 15% of domestic sales.
Sun Pharma’s 2,700-strong field force has ensured wide market
reach and largest market share (~4.4%) in highly fragmented
domestic pharma market.
US business to flourish with Taro in bag
After a two-year legal tussle, Sun Pharma acquired majority control
of Taro Pharma in the US. Taro’s acquisition has strengthened the
portfolio of the company in US market. However, in the short term,
it would act as a headwind to the margins of the company (though in
Q1FY12 Taro reported better than expected margin; 35% v/s
expected 27%). Sun pharma as a whole as on June 2011 has ANDAs
for 151 products pending for approval (including 19 tentative
approvals).
Steady growth ahead; Leveraging through Partnership
We believe the worst of Sun Pharma’s troubles regarding its
acquisition of Taro are over, and the company is now set to show
steady growth in the US base business. Sun Pharma and Merck JV
for EMs excluding India will pay off FY14 onwards. We expect
24%/26% Revenue/PAT CAGR respectively over FY11-FY13E.
Healthy Balance Sheet (US$1bn cash) and superior return ratios
makes Sun Pharma as one of the best bet in pharma space.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Preeminent play in pharma space
Sun Pharma has one of the fastest growing and most resilient
businesses among Indian generics players. The company has
historically focused on the domestic and US markets, but lately it has
started generating significant revenues in other geographies as well
(International market constituted 60% of FY11 sales). The company
has consistently delivered growth and has proven its expertise in
driving operational efficiencies to extract margins that are
significantly higher than competitors (~34% v/s industry margin of
~22%)
One of the best franchises in domestic market
Company’s domestic business comprises mainly of high margin and
high growth therapeutic areas like CVs, Neurology and diabetology
(chronic segment). The brand franchise of the drugs in chronic
segments, once established, is durable. Industry surveys indicate
high level of brand recognition for Sun Pharma’s products among
doctors. Sun Pharma’s prudent brand building strategy is evident
from its top 10 selling brands that constitute 15% of domestic sales.
Sun Pharma’s 2,700-strong field force has ensured wide market
reach and largest market share (~4.4%) in highly fragmented
domestic pharma market.
US business to flourish with Taro in bag
After a two-year legal tussle, Sun Pharma acquired majority control
of Taro Pharma in the US. Taro’s acquisition has strengthened the
portfolio of the company in US market. However, in the short term,
it would act as a headwind to the margins of the company (though in
Q1FY12 Taro reported better than expected margin; 35% v/s
expected 27%). Sun pharma as a whole as on June 2011 has ANDAs
for 151 products pending for approval (including 19 tentative
approvals).
Steady growth ahead; Leveraging through Partnership
We believe the worst of Sun Pharma’s troubles regarding its
acquisition of Taro are over, and the company is now set to show
steady growth in the US base business. Sun Pharma and Merck JV
for EMs excluding India will pay off FY14 onwards. We expect
24%/26% Revenue/PAT CAGR respectively over FY11-FY13E.
Healthy Balance Sheet (US$1bn cash) and superior return ratios
makes Sun Pharma as one of the best bet in pharma space.
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