SUN PHARMACEUTICALS

Sun Pharmaceuticals is well positioned for growth due to its favourable business mix (42 per cent of FY11 revenues from domestic formulations and 41 per cent from US export formulations, the rest being contributed by Taro). The company’s domestic business is poised to witness better growth than the industry, due to exposure to the growing chronic therapies segment. This would be aided in the near term by Sun Pharma Advanced Research Centre’s R&D initiatives. The 19 ANDAs approved in the last 12 months, the 152 awaiting approval and the ongoing improvement in Taro’s margins are likely to be growth drivers going forward. It is believed that Sun Pharma will soon be able to resolve its USFDA issues on its Caraco facility, with the company having achieved USFDA resolution of its Cranberry facility and Taro’s facility in Canada in the last six months. One can look at the stock from a medium to long-term perspective.