Sun Pharma's Q4FY15 results disappoint the street, margins down q/q from 30% to 14.5%

1. Sun Pharmaceutical Industries Ltd
Price (`) 878.95
52 W H/L( ) 1200.70/590.10
Mkt. Cap.( Cr) 211512.58
Latest Equity(Subscribed) 240.64
Latest Reserve (cons.) 26251.51
Latest EPS (cons.) -Unit Curr. 19.72
Latest P/E Ratio -cons 44.58
LatestBookvalue(cons.)-UnitCurr. 110.09
Latest P/BV - cons 7.98
Dividend Yield -% 0
Face Value 1
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VALUE PARAMETERS
STOCK DATA
BSE Code 524715
NSE Symbol SUNPHARMA
Reuters SUN.BO
Bloomberg SUNP IN
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Financial Results
In Cr.
Particulars Qtr Ending Qtr Ending
Mar 15 Var. (%)
Total Income 6157.05 4058.61 51.7
OPM (%) 14.49 44.36
OP 892.39 1800.6 -50.44
Other income 383.69 193.83 97.95
PBIDT 1276.08 1994.43 -36.02
Net Finance Charges 124.78 3.91 3091.3
PBDT 1151.3 1990.52 -42.16
Depreciation 561.93 106.1 429.62
PBT before EO 589.37 1884.42 -68.72
EO 0 0
PBT after EO 589.37 1884.42 -68.72
Tax expense -599.91 119.93 -600.22
PAT 1189.28 1764.49 -32.6
Minority Interest 297.2 177.37 67.56
Share of Profit of Associates -4.03 0
Profit after Minority Interest and
Share of profit of Associates
EPS (`) 4.29 7.66 -44.05
Mar 14
888.05 1587.12 -44.05
Current Price: `878.95
SHARE HOLDING PATTERN (%)
Description as on % of Holding
31/03/2015
Foreign 31.34
Institutions 5.09
Govt Holding 0.08
Non Promoter Corp. Hold. 2.68
Promoters 54.72
Public & Others 6.1
The street was mainly disappointed with the operational numbers this quarter,
what resulted in margins crunching down to that 14.5 percent this quarter versus
30 percent in the previous quarter.
Highlights of Q4FY15 consolidated financials
ŸNet sales from operations at `6,145 crores. Branded generic sales in India at 1,569
crores. US finished dosage sales at US$ 488 million. Emerging Markets sales at US$ 123
million. Rest of World sales at US$ 84 million.
ŸEBITDA at 880 crores resulting EBITDA margin of 14.3%. Net profit at 888 crores post
reversal of MAT credit.
ŸEBITDA as well as Net Profit were adversely impacted by a few items, relating to
professional charges, harmonization of policies of erstwhile Ranbaxy with the Company,
etc. The impact of these items appearing above EBITDA was approximately 10% of net
sales and on items appearing below EBITDA was approximately 7% of net sales.
India Branded Generics - Market Leadership
Sale of branded prescription formulations in India for Q4FY15 was 1,569 crores. For the full
year FY15, sales were at 6,717 crores. Sun Pharma is ranked No. 1 and holds approximately
9% market share in the 86,000 crore pharmaceutical markets as per March-2015 AIOCD-
AWACS report. As per latest SMSRC report, Sun Pharma is ranked no. 1 based on share of
prescriptions with 12 classes of doctors: psychiatrists, neurologists, cardiologists,
ophthalmologists, orthopedicians, nephrologists, gastroenterologists, diabetologists,
urologists, dermatologists, chest physicians and consultant physicians.
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June 04, 2015

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Geographical segmentation
US Formulations
Sales in the US were US$ 488 million for the quarter, accounting for 49% of total sales. For the
full year, sales were US$ 2,244 million accounting for 50% of total sales. Taro recently posted Q4
FY15 sales of US$ 244 million, up 30.5% from the corresponding quarter last year. For the full
year, sales were US$ 863 million, up by 14% over 12 months last year. Taro's net profit for Q4
was US$ 152 million, up by 70% over Q4 last year. Net profit for full year FY15 was at US$ 484
million, up by 39% over 12 months last year.
Emerging Markets
Sales in emerging markets were at US$ 123 million for Q4, accounting for 12% of total sales.
Emerging market sales for full year FY15 were US$ 611 million, and accounted for 14% of total
sales.
Rest of World Markets
Formulation sales in Rest of World (ROW) markets excluding US and Emerging Markets were
US$ 84 million in Q4FY15 and US$ 381 million for the full year FY15. ROW markets accounted
for over 8% of revenues for both Q4 and full year FY15.
Active Pharmaceutical Ingredients (API): The Company increased the API supply for
captive consumption significantly for key products which enabled us to enjoy the benefits of
strategic vertical integration. As a result, for Q4FY15, external sales of API were at 286 crores.
For the full year FY15, API sales were 991 crores. A cumulative of 396 DMF/CEP applications
have been made, with 270 approved so far.
Research - Investing for future: Consolidated R&D expense for Q4 FY15 was 579 crores,
or 9.4% of sales. This includes significant investments on account of funding the clinical
development of MK-3222, the psoriasis monoclonal anti-body in-licensed from MSD (US). For
full year FY15, R&D spend was Rs. 1,955 crores at 7.2% of sales. We now have a comprehensive
product offering in the US market with approved ANDAs for 438 products while filings for 159
products await US FDA approval, including 12 tentative approvals. For FY15, ANDAs for 19
products were filed and 14 approvals were received. The total number of patent applications
submitted now stands at 1,598 with 951 patents granted so far.
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