Sun Pharma gears up - Views on News from Equitymaster

Helping You Build Wealth With Honest Research
Since 1996. Try Now

  • MyStocks


Login Failure
(Please do not use this option on a public machine)
  Sign Up | Forgot Password?  

Sun Pharma gears up

Jul 6, 2000

A 33% growth in turnover in a year when the overall industry grew by 9.8%, a 20% pretax margin and a return on networth of 24% is a stupendous performance by any standard. That’s what Sun Pharma has achieved in 1999–2000.

  FY99 FY00
PBT/Sales 17.0% 20.0%
Sales/Assets 0.95 1.15
PAT/PBT 0.96 0.93
Assets/NetWorth 1.22 1.13
RONW 18.9% 24.2%

The company has achieved this, by a focus on prescription based drugs focused on cardiology, neurology, pychiatry, gastroentology etc. Last year the group decided to make Sun Pharmaceutical Exports into a 100% subsidiary, which further helped boost export growth to 27% last year. (Bulk drugs comprise almost 80% of the company’s exports.)

Therapeutic segments % of turnover
Cardiology 20.7
Neurology 18.1
Psychiatary 16.6
Gastroentology 10.2
Respiratory 8.0
Anti–infectives 6.5
Gynaecology 6.3
Orthopaedics 4.7

While this topline growth is expected to be maintained this year, what is important that the company is now venturing increasingly into anti–infectives a segment where competition is from the bigger boys viz. Ranbaxy, Cipla etc. However, the fact remains that anti–infectives comprise almost 70% of the formulations sold in the country. And if a company wants to grow in size, in the domestic market, it cannot avoid entry into anti–infectives.

For the export market, the company is planning to cater to the generic market via its US affiliate Caraco in the future. If one were to assume that the company’s topline would grow by another 30% in the current year and the company is able to maintain its pre–tax margin, the stock at the current level of Rs 607 quotes at a multiple of 25 times FY2001 earnings.

Sun Pharma has changed gears alright. What remains to be seen is whether the company is able to sustain its profitability.

Equitymaster requests your view! Post a comment on "Sun Pharma gears up". Click here!


More Views on News

Sun Pharma's Stock Falls 4% After Its March Quarter Results (Views On News)

May 28, 2021

In the past three months, the stock has outperformed the market by gaining nearly 20%. Can it go higher?

What's Behind the Rally in Pharma Stocks? (Views On News)

May 11, 2021

The second wave of Covid has given a new lease of life to pharma stocks.

SUN PHARMA Announces Quarterly Results (3QFY21); Net Profit Up 87.4% (Quarterly Result Update)

Feb 1, 2021 | Updated on Feb 1, 2021

For the quarter ended December 2020, SUN PHARMA has posted a net profit of Rs 19 bn (up 87.4% YoY). Sales on the other hand came in at Rs 88 bn (up 8.4% YoY). Read on for a complete analysis of SUN PHARMA's quarterly results.

Why Did Pharma Stocks Surge? (Views On News)

Jul 17, 2021

A look into the factors contributing to the rally in pharma stocks.

Bajaj Healthcare Rallies 11% on DRDO Nod to Manufacture Oral Covid Drug (Views On News)

Jul 8, 2021

Bajaj Healthcare has more than doubled investors' wealth in the year 2021 so far. The counter has delivered over 240% return in the last one year.

More Views on News

Most Popular

A 25 Bagger Indian Stock at the Centre of the Global Semiconductor Chip Shortage (Profit Hunter)

Jul 13, 2021

One technology company in India is grossly underrated despite its dominant role in semiconductor chip designing.

RBI Opens a New Market for Investors (Fast Profits Daily)

Jul 16, 2021

You now have a new way to create wealth. Grab it with both hands.

OPEC is Dying! RIP OPEC (Fast Profits Daily)

Jul 13, 2021

Why the global oil cartel is unravelling and how India stands to gain.

Top 4 Companies that Are Strong Monopolies (Views On News)

Jul 10, 2021

A close look at the top 4 companies with a dominant position in their industry.

A Better Way than the Zomato IPO to Play the Food Delivery Megatrend (Profit Hunter)

Jul 14, 2021

A unique backdoor way of making big profits from smallcap companies.


Become A Smarter Investor
In Just 5 Minutes

Multibagger Stock Guide 2021
Get our special report Multibagger Stocks Guide (2021 Edition) Now!
We will never sell or rent your email id.
Please read our Terms


Jul 23, 2021 (Close)


  • Track your investment in SUN PHARMA with Equitymaster's Portfolio Tracker. Set live price alerts, get research alerts and more. Get access now...
  • Add To MyStocks