A

PROJECT REPORT

ON

“Enterprise Analysis & Desk Research: SUN PHARMACEUTICAL INDUSTRIES LTD.”

In Partial Fulfillment of the Subject

EADR (115)

Submitted By

OMKAR ASHOK DHAMALE (Division:A Roll No.10)

Guided By

Mr. Vijay Sonaje

Submitted To

Marathwada Mitra Mandal’s Institute of Management Education and Research Training

(IMERT)

(2018-19)

1
DECLARATION

I, the undersigned, hereby declare that the Project Report entitled “EnterpriseAnalysis
& Desk Research: Company Name” in partial fulfillment of the subject EADR (115) under the
guidance of Prof. Vijay Sonaje is my original work and the conclusion drawn there in are based
on the material collected by myself.

Place:PUNE

Date: 22/10/2018 OMKAR ASHOK DHAMALE

DIV- A, ROLL NO. 10

2
EXECUTIVE SUMMARY

Given the shifting dynamics of the global pharmaceutical market,

progressive investments in innovative specialty products show the way

forward for us.

At Sun Pharma, we have identified specialty as an additional growth

engine; and a means to move up the pharmaceutical value chain

through development and global commercialisation of branded

patented products. We have invested significant resources in this

initiative in the past; and will continue to invest in building the business

further in the coming years.

We are meticulously nurturing the specialty business; and have built a

portfolio of about 10 specialty products, of which five are already

in the market, two more likely to be commercialised in the next few

quarters; and two more awaiting USFDA approval.

The current financial year is likely to be a very important year in

this journey with the potential launch of key specialty products in

the US market. We are reinforcing our global specialty business with

focused investments and strategies; and in the long-term, we expect

the contribution of specialty products to increase substantially in our

overall business.

3
INDEX

Chapter No. TITLE PAGE NO.

1 Introduction 5-6
2 Industry Profile 7-9
3 Company Profile 10-16
4 Review of Literature 17-21
5 Objectives 22
6 Research Methodology 22
7 Data Analysis & Interpretation 24-33
8 Observation & Findings 34
9 Conclusion 34
10 Bibliography 35

4
INTRODUCTION

Sun Pharma is the world’s fifth largest specialty generics

pharmaceutical company. It is also India’s largest and most valuable

pharmaceutical enterprise by size and market capitalisation. A

vertically integrated business, economies of scale and a skilled team

enable it to deliver well-timed quality products at affordable prices.

The Company is deepening its global footprint as a highly trusted

pharmaceutical company among consumers and healthcare

professionals in over 100 countries. It has multiple manufacturing

facilities and R&D centres across the world. The Company has

32,000+ global employee base that comprises over 50 nationalities.

As an innovation driven enterprise, it has robust R&D capabilities

with investments of over 8.6% of annual revenues.

Sun Pharma’s Global Consumer Healthcare (GCH) business is ranked

among the top 10 across four emerging markets. Its API business

footprint is strengthened through 14 world-class API manufacturing

facilities around the world.

The Company has operations spanning segments like specialty

products, branded generics, complex and pure generics, overthe-

counter (OTC) products, anti-retrovirals (ARVs), and

active pharmaceutical ingredients (APIs). It also manufactures

5
intermediates for specialty APIs, offering a full range of dosage forms,

including tablets, capsules, injectables, ointments, creams and liquids.

In India, Sun Pharma enjoys leadership across 13 classes of doctors

with 32 brands featuring among the top 300 pharmaceutical brands.

Internationally, the Company has a strong presence in the US,

emerging markets, Western Europe, Japan, Canada, Israel, Australia

and New Zealand (A&NZ). It has multiple production units approved

by various regulatory authorities, including the USFDA.

6
Industry Profile

Industry profile of the company: Sun Pharmaceuticals Ltd. is India's largest (by market
capitalization) and the world's 5th largest specialty generic pharmaceutical
company. The company manufactures and sells high-quality, affordable medicines in
over 150 countries across 6 continents.

As of 31st March 2015, Sun Pharmaceuticals Ltd. had an intellectual capital of 2,000+ scientists,
and had invested over 7% of its annual revenues in R&D. The company has over 48
manufacturing facilities across the globe. 30 of their brands are among the top 300 pharma
brands in India.

The company markets its pharmaceutical formulations as generics and branded generics in India
and all major international markets. The therapeutic segments covered by the company's
portfolio of 2000+ molecules include psychiatry, anti-infectives, neurology, cardiology,
orthopaedics, diabetology, gastroenterology, ophthalmology, nephrology, urology, dermatology,
gynaecology, respiratory, oncology, dental and nutritionals.

Sun Pharma's business is broadly categorized into four segments: Active Pharmaceutical
Ingredients (API), International Branded Generics, Indian Branded Generics and US Generics.

They also make specialty APIs that include steroids, hormones, peptides and anti-
cancers manufactured at 14 international standard manufacturing facilities around the world.

Over 72% of Sun Pharma sales are from overseas markets. The US is its single largest market,
accounting for almost 60% of its turnover.

7
 Major Players and their Market Share

RANK COMPANY Market Capitalization

2017 (INR crores)
1 SUN PHARMA 1,55,716 cr
2 LUPIN Ltd. 68,031 cr
3 Dr. REDDY’S LAB 49,293 cr
4 CIPLA 47,319 cr
5 AUROBINDO PHARMA 41,283 cr
6 ZYDUS CADILA 31,631 cr
HEALTHCARE
7 PARIMAL ENTERPRISE 30,975 cr
8 GLENMARK PHARMA 25,302 cr
9 TORRENT PHARMA 22,742 cr

8
Government policies:

Some of the initiatives taken by the government to promote the pharmaceutical sector in India
are as follows:

 The National Health Protection Scheme is largest government funded healthcare

programme in the world, which is expected to benefit 100 million poor families in the
country by providing a cover of up to Rs 5 lakh (US$ 7,723.2) per family per year for
secondary and tertiary care hospitalisation. The programme was announced in Union
Budget 2018-19.

 In March 2018, the Drug Controller General of India (DCGI) announced its plans to start
a single-window facility to provide consents, approvals and other information. The move
is aimed at giving a push to the Make in India initiative.

 The Government of India is planning to set up an electronic platform to regulate online

pharmacies under a new policy, in order to stop any misuse due to easy availability.

 The Government of India unveiled 'Pharma Vision 2020' aimed at making India a global
leader in end-to-end drug manufacture. Approval time for new facilities has been reduced
to boost investments.

 The government introduced mechanisms such as the Drug Price Control Order and the
National Pharmaceutical Pricing Authority to deal with the issue of affordability and
availability of medicines.

9
COMPANY PROFILE

HISTORY: Sun Pharmaceutical Industries began with just 5 products to treat

psychiatry ailments in 1983. Sales were initially limited to 2 states – West
Bengal and Bihar. Sales were rolled out nationally in 1985. Products that are
used in cardiology were introduced in 1987, and Monotrate, one of the first
products launched at that time has since become one of our largest selling
products. Important products in Cardiology were then added; several of
these were introduced for the first time in India. Sun Pharma was listed on
the main stock exchanges in India in 1994.

It is an international speciality pharma company, with a presence in 30 markets. It also make

active pharmaceutical ingredients. In branded markets, its products are prescribed in chronic
therapy areas like cardiology, psychiatry, neurology, gastroenterology, diabetology and
respiratory. Realizing the fact that research is a critical growth driver, they established their
research center SPARC in 1993 and this created a base of strong product and process
development skills. In India, it has reached leadership in each of the therapy areas that we
operate in, and are rated among the leading companies by key customers. Strengthening market
share and keeping this customer focus remains a high priority area for the company.

Another API plant, its Ahmednagar plant, was acquired from the multinational Knoll
Pharmaceuticals in 1996, and upgraded for approvals from regulated markets, with substantial
capacity addition over the years. This was the first of several sensibly priced acquisitions, each of
which would bring important parts to the long–term strategy.

With worldclass technology and a team of strong professionals, it has built sites and systems that
meet the most stringent international manufacturing standards. Expert quality teams ensure that
systems and processes remain in compliance with the latest standards.

A number of its plants hold approvals from the USFDA and the UK MHRA. APIs and Dosage
forms are made in 19 sites across India, US, Hungary and Bangladesh.

10
MILESTONE: 1983 – Sun Pharma begins operations in Kolkata with 5
psychiatry – based products, first with 2 people and then with a 10 –
employee team. Year 1 turnover – Rs. 1 million. Within a year, the marketing
effort is expanded to cover all eastern states. A compact manufacturing
facility for tablets/capsules is set up at Vapi.

1986 – Administrative office is set up in Mumbai. Customer coverage extends to select cities in
Western India.

1987 – Marketing operations are rolled out nation–wide.

1988 – With the launch of the brands Monotrate and Angizem, the first few cardiology products
are launched. We feature for the first time in a market audit by the prescription tracking
company, ORG* at rank 107th with 0.1% market share.

1989 – The corporate office is shifted to Baroda, in the western state of Gujarat. Products used in
gastroenterology are introduced. Exports to neighbouring countries begin. 1991 – Construction
begins at the first research center SPARC (Sun Pharma Advanced Research center), with 46,000
sq ft of research space, and investments of almost the size of that year's profits. The company's
turnover is Rs. 9.74 cr, and market rank is 70th.

1993 – SPARC, the first research center, is inaugurated by His Excellency Shri K. R. Narayanan,
the Vice President of India. An office is begun in Moscow. Products are now registered across 10
markets.

1994 – After an IPO in October, it got listed on the major stock exchanges in India. The offering
is oversubscribed 55 times. A dosage form plant at Silvassa starts production. Major expansion at
the plant in Vapi is completed. For the first time, a brand from the company, Monotrate, features
among the top 250 pharma brands in the Indian market. Experimenting with a focused marketing
approach, a separate division, Synergy, is carved out to market Psychiatry/ Neurology products.

1995 – Its first API plant at Panoli starts production.

A new division, Aztec, now renamed Azura, is begun for cardiology products, with a further
reallocation of products across divisions. Inca, a new division to market critical care medication

11
to intensive care units begins operations. International marketing is strengthened with offices in
Ukraine and Belarus.

1996 – An API–manufacturing unit at Ahmednagar, the first of the our acquisitions, is bought
from Knoll Pharma. An equity stake is also picked up in Gujarat Lyka Organics Ltd., a
manufacturer of Cephalexin Active with a USFDA approval for the intermediate, 7ADCA. At the
close of the year, we rank 27th with 2 products among the country's top selling 300 pharma
brands. Product registrations are now in place across 24 countries.

1997 – It begin the first of its international acquisitions. As part of a technology–for–equity

agreement, a stake is acquired in a generic dosage form manufacturer; the Detroit–based Caraco
Pharm Labs. An equity stake is taken in MJ Pharma, a manufacturer of several dosage form lines
with UK MHRA approval for Cephalexin capsules.

TDPL, a company with an extensive product offering (oncology, fertility, anesthesiology, pain
management) is merged with Sun Pharma. Non profitable/small generic lines and several smaller
brands are dropped to rationalize the product mix.

TDPL's products offer a ready entry with known brands and customer equity into new high
growth therapy areas like oncology and gynecology. Marketing is reorganized once again, this
time into 6 speciality–focused divisions. A research and development facility over 6,000 sq ft in
Mumbai, our second research site, is established. This center is equipped to make dosage forms
and create supporting technical documentation for the generic markets in North America and
Europe.

1998 – A basket of brands, which include several in the respiratory/asthma area, are acquired
from Natco Pharma. Its new formulation plant at Silvassa commences operations.

1999 – Rank moves within the top 10 in the domestic market. For a quick entry in
ophthalmology, Milmet Labs is merged into Sun Pharma. The Cephalexin API manufacturer
Gujarat Lyka Organics is merged with Sun Pharma.

6 brands now feature among the leading 300 prescription pharma brands in India.

12
2000 – Ranked 5th among all companies in the domestic market on a monthly basis. Pradeep
Drug company, a Chennai based API manufacturer is merged with Sun Pharma.

Plans are shared to set up a new research campus in Chennai, which is later dropped as a suitable
site is found in Baroda where we have an existing base.

2001 – A new formulation plant is built in Dadra. This new plant is spread over a 5–acre site
with built up area of 120,000–sq. ft. and has been designed and built to comply with international
regulatory requirements, such as the UKMHRA and USFDA.

The erstwhile TDPL division is renamed Spectra. A new division, Arian, targeting
cardiologists/physicians and diabetologists, is launched.

2002 – Forbes Global ranks Sun Pharma in the list of best small 200 companies for 2002
(turnover less than $500 million). Sun Pharma is selected as the best company by Express
Pharma Pulse, for overall performance for 2002 (in the category A – market share over 2.5%). 4
manufacturing sites win the prestigious IDMA awards.

Work commences on a new, state–of–the–art drug discovery campus in Baroda; this 16–acre site,
with space for 400+ scientists on completion, will be commissioned over the next two years.
Work begins on a new R&D center in Mumbai, with 50,000 sq. ft. floor area for projects aimed
at the North American and European markets.

2003 – Forbes Global ranks Sun Pharma in the list of the best small 200 companies for 2003
(turnover less than $500million). Sun Pharma is rated amongst the best–managed companies for
2003 across all sectors. (Business Today–AT Kearney study of best–managed companies)

2004 – Sun Pharma acquires common stock and options from 2 large shareholders of Caraco,
increasing stake to over 60% from 44% at a total outlay of about $42 million. By 2007, this stake
has reached 75% on a diluted basis. The formulation site in Halol, India (the erstwhile MJ
Pharma site) receives approval from USFDA, UK MHRA, South African MCC, Brazilian
ANVISA and Columbian INVIMA. The BT Stern Stewart survey places Sun Pharma among the
top 20 wealth creators in India and among the top 3 wealth creators in the pharma sector.
Construction at a formulation manufacturing site at Jammu is completed. Its first joint venture

13
manufacturing unit, in Dhaka, Bangladesh is commissioned. This modern site is spread over
25,000 sq. ft.

Two of Sun Pharma's API factories receive USFDA approval, taking the total number of US
FDA approved sites to three.

Sun Pharma acquires a Cephalosporin Actives manufacturer, Phlox Pharma, with European
approval for cefuroxime axetil amorphous. By 2007, a formulations facility to make sterile and
non sterile formulations have been built, and the API and non–sterile sections have been
approved by the USFDA.

Niche brands are bought from the San Diego, US based Women's First Healthcare. (WFHC, not
listed). These brands are the gynecological Ortho–Est® (estropipate), and the antimigraine
preparation Midrin®.

Forbes Global ranks Sun Pharma in the list of most valuable companies for 2004 (turnover less
than $2bill).

2005 – Sun Pharma buys a plant in Bryan, Ohio, US and the business of ICN, Hungary from
Valeant Pharma.

Sun Pharma acquires the intellectual property and assets of Able Labs from the US District
Bankruptcy court in New Jersey in December 2005.

Dilip Shanghvi, the CMD, receives the E&Y Entrepreneur of the Year award in healthcare and
life sciences for 2005.

Sun Pharma is selected by Forbes amongst the best 200 companies (sales less than USD 1
billion) in Asia. This is the fourth time in 5 years that the company has been selected.

2006 – Announced the demerger of innovative business with pipelines, people, equipment and
funding, into a new company.

2007 –Completed the demerger of the innovative business, with requisite legal and regulatory
approvals. SPARC ltd, the new company, is listed on the stock exchanges in India, the first pure
research company to be so listed.

14
In May 2007, it, along with its subsidiaries, signed definitive agreements to acquire Taro
Pharmaceutical Industries Ltd., (TAROF, Pink Sheets), a multinational generic manufacturer
with established subsidiaries, manufacturing and products across the U.S., Israel, Canada for
$454 mill. This all–cash deal is subject to Taro shareholder approval and requisite regulatory
clearances

2008 – In November 2008, it along with its subsidiaries, acquired 100% ownership of Chattem
Chemicals, Inc.,a narcotic raw material importer and manufacturer of controlled substances with
a approved facility in Tennessee. This will offer vertical integration for its controlled substance
dosage form business in the US.

2010 – In the first week of September, the Supreme Court of Israel unanimously dismissed the
appeal by Taro of the previous ruling by the Tel–Aviv District Court holding that the Israeli
special tender offer (STO) rules do not apply to the Tender Offer by Suns subsidiary, Alkaloida,
to purchase all outstanding Ordinary Shares of Taro. In the last week of September: we
completed the acquisition of a controlling stake in Taro and increased economic interest and their
voting rights. This doubles the size of our US business.

2011 – Dilip Shanghvi, CMD, received the E&Y Entrepreneur of the Year Award for 2010.
(ORG – Operations Research Group Audit of Retail Chemist Sales, later renamed the IMS –
ORG Retail Store Audit. Both ORG and IMS are the trademarks of their registered owners)

2014 – April 6, 2014 ? Sun Pharmaceutical Industriesand Ranbaxy Laboratories announced that
they have entered into definitive agreements pursuant to which Sun Pharma will acquire 100% of
Ranbaxy in an all–stock transaction.

AWARDS:

 Sun Pharma is selected as the best company by Express Pharma Pulse, for overall
performance for 2002.

 4 manufacturing sites win the prestigious IDMA awards.

15
  Forbes Global ranks Sun Pharma in the list of the best small 200 companies for 2003.

 Forbes Global ranks Sun Pharma in the list of most valuable companies for 2004.

LEGAL ASPECTS : The Mumbai Industrial Court has ruled that Sun Pharmaceutical
Industries adopted unfair labour practices by holding back salaries of 86 sales promotion
employees since May after they protested planned changes in service conditions.
In an interim order on July 29, the court directed India’s largest drug maker to pay the staff and
directed the company not to terminate employees without following the due procedure of law.
The court rejected other forms of relief sought in the petition filed by a union representing the
staffers, who wanted full payment with 18% interest on dues.

MANAGEMENT TEAM:

Managing Director : Dilip S Shanghvi

Whole-time Director : Sudhir V Valia
Whole-time Director : Sailesh T Desai
Independent Director : S Mohanchand Dadha
Independent Director : Keki M Mistry
Independent Director : Ashwin Dani
Company Secretary : Sunil R Ajmera
Chairman : Israel Makov
Independent Director : Rekha Sethi
Whole-time Director : Kalyanasundaram Subramanian
Independent Director : Vivek Chaand Sehgal
Addtnl Independent Director : Gautam Doshi
AUDITOR : S R B C & Co LLP
Pharmaceuticals - Indian - Bulk Drugs &
IND NAME :
Formln
HOUSE NAME : Sun Pharma

16
REVIEW OF LITERATUR

Fundamental Analysis: is the study of economic, industry, and company conditions in an

effort to determine the value of a company’s share. Fundamental analysis typically

focuses on key statistics in a company’s financial statements to determine if the stock

price is correctly valued. After determining the condition and outlook of the economy,

the industry, and the company, the fundamental analyst determines if the company’s

stock is overvalued, undervalued or correctly valued.

Fundamental analysis covers various financial and non-financial aspects such as

evaluation of the economy and industry scenario, company management and company

financial position and so on.

 Industry Analysis : The Indian pharmaceuticals market witnessed growth at a CAGR

of 5.64 per cent, during FY11-16, with the market increasing from US$ 20.95 billion in
FY11 to US$ 27.57 billion in FY16. The industry’s revenues are estimated to have grown
by 7.4 per cent in FY17.

 Indian pharmaceutical market grew 5.5 per cent in CY2017 in terms of moving annual
turnover. In March 2018, the market grew at 9.5 per cent year-on-year with sales of Rs
10,029 crore (US$ 1.56 billion).

 By 2020, India is likely to be among the top three pharmaceutical markets by incremental
growth and 6th largest market globally in absolute size.

 Increase in the size of middle class households coupled with the improvement in medical
infrastructure and increase in the penetration of health insurance in the country will also
influence in the growth of pharmaceuticals sector.

17
  Ratios

1.Current Ratio:-The current ratio is a liquidity ratio that measures a company's ability to pay
short-term and long-term obligations. The formula for calculating a company’s current ratio is:

Current Ratio = Current Assets / Current Liabilities

The current ratio is also known as the working capital ratio.

2.Liquid Ratio:-The quick ratio is an indicator of a company’s short-term

liquidity position, and measures a company’s ability to meet its short-term
obligations with its most liquid assets.
Mathematically, quick ratio is calculated as follows:

Quick Ratio = Liquid Assets / Current Liabilities, or

Quick Ratio = (Cash and Equivalents + Marketable Securities + Accounts Receivable) / Current
Liabilities.

3.Debt to Equity Ratio:-Debt/Equity (D/E) Ratio, calculated by dividing a

company’s total liabilities by its stockholders' equity, is a debt ratio used to
measure a company's financial leverage. The D/E ratio indicates how much
debt a company is using to finance its assets relative to the value of
shareholders’ equity. The formula for calculating D/E ratios is:
Debt/Equity Ratio = Total Liabilities / Shareholders' Equity.

4.Fixed Assets to Capital Employed Ratio:-Fixed Assets/ Capital Employed Ratio indicate the
extent to which the long term funds are sunk in fixed assets which are supplied by creditors and
owners of the firm.

Formula to calculate Capital Employed Ratio = (Fixed Assets/Capital Employed).

18
5.Net Profit Ratio:- The net profit percentage is the ratio of after-tax profits to net sales . It
reveals the remaining profit after all costs of production, administration, and financing have
been deducted from sales, and income taxes recognized.

The formula for the net profit ratio is to divide net profit by net sales, and then multiply by
100. The formula is:

(Net profit ÷ Net sales) x 100

6.Gross Profit Ratio:-Gross profit ratio (GP ratio) is a profitability ratio that shows the
relationship between gross profit and total net sales revenue. It is a popular tool to evaluate the
operational performance of the business . The ratio is computed by dividing the gross profit
figure by net sales.

Gross Profit Ratio = (Gross Profit/ Net Sales) x 100

6.Return on Total Assets Ratio:-Return on assets (ROA) is an indicator of how profitable a

company is relative to its total assets. ROA gives a manager, investor, or analyst an idea as to
how efficient a company's management is at using its assets to generate earnings. Return on
assets is displayed as a percentage and its calculated as:

ROA = Net Income / Total Assets.

7.Return on Equity Ratio:- Return on equity (ROE) is the amount of net income returned as a
percentage of shareholders equity. Return on equity (also known as "return on net worth"
[RONW]) measures a corporation's profitability by revealing how much profit a company
generates with the money shareholders have invested.

ROE is expressed as a percentage and calculated as:

Return on Equity = Net Income/Shareholder's Equity.

8. Return on Capital Employed Ratio:-Return on capital employed (ROCE) is a

financial ratio that measures a company's profitability and the efficiency with
which its capital is employed. ROCE is calculated as:

19
ROCE = Earnings Before Interest and Tax (EBIT)*100 / Capital Employed

9.Earning Per Share(EPS):-Earnings per share (EPS) is the portion of a

company's profit allocated to each outstanding share of common stock.
Earnings per share serves as an indicator of a company's profitability. EPS is
calculated as:

EPS = (EAT- Preference Dividend) /Number of Equity Shares

10.P/E Ratio (Price to Earnings Ratio):-The price-earnings ratio (P/E ratio) is

the ratio for valuing a company that measures its current share price relative
to its per-share earnings. The price-earnings ratio is also sometimes known
as the price multiple or the earnings multiple.

The P/E ratio can be calculated as: Market Value per Share / Earnings per
Share.

11.Book Value:-Book value per common share is a formula used to calculate the
per share value of a company based on common shareholders' equity in the
company.

Formula of Book Value Per Share:- Shareholders Fund/ Number of Equity

Shares

12.Market Value to Book Value:- The book-to-market ratio is used to find the
value of a company by comparing the book value of a firm to its market
value. Book value is calculated by looking at the firm's historical cost, or
accounting value. Market value is determined in the stock market through its
market capitalization.

The formula for the book-to-market ratio is:

20
Book-to-market ratio = book value of firm / market value of firm.

13.Fixed Assets Turnover Ratio:-The fixed-asset turnover ratio is, in general,

used by analysts to measure operating performance. It is a ratio of net sales
to fixed assets. This ratio specifically measures a company's ability to
generate net sales from fixed-asset investments, namely property, plant and
equipment (PP&E), net of depreciation. In general, a higher fixed-asset
turnover ratio indicates that a company has more effectively utilized
investment in fixed assets to generate revenue.

The fixed-asset turnover ratio is calculated as:

14.Sales to Working Capital:- Working capital turnover is a ratio which

measures how efficiently a company is using its working capital to support a
given level of sales. Also referred to as net sales to working capital, it shows
the relationship between the funds used to finance a company's operations
and the revenues a company generates as a result.

21
OBJECTIVES

SUN PHARMA specialty initiatives are directed at achieving two main objectives

– to build an additional engine of future growth and secondly to

move up the pharmaceutical value chain through development and

commercialisation of branded patented products. While we intend to

target the global market with our specialty products, developed markets

are likely to be key contributors to this strategy.

Our specialty portfolio targets Dermatology, Ophthalmic, Oncology

and CNS segments. We are developing our specialty products pipeline

with a focus on improving patient outcomes either by addressing

unmet medical needs or by enhancing patient convenience through

differentiated dosage forms.

22
RESEARCH METHODOLOGY

To conduct the market research first of all it is necessary to create a research design.

A research design is basically a blue print of how a research is to be conducted, it may

include;

1. Choosing the approach.

2. Determining the types of data needed.

3. Locating the source of data.

4. Choosing the method of data.

Research Design:

Basically there are 3 types of approaches used during the research:

 Exploratory

 Descriptive

 Experimental

Type of Data Collection:

The collection method involved is Secondary Data i.e. the data which already exists and

is collected from the published sources. The source from which secondary data is

collected are internet, website of the company, money control site.

Scope of Research: The scope of the research is limited to one company sticking to 3 years of
data, only

analyzing the financial statement of 3 financial years.

Limitation: The duration of the session was limited to 20 hours.

23
DATA ANALYSIS & INTERPRETATION

Product Profiles:

Ginseng, Vitamins and Minerals VMS-Vitamins, Minerals

REVITAL H and Supplements

REVITAL H Ginseng, Vitamins and Minerals VMS-Vitamins, Minerals

WOMAN (Specially formulated for women) and Supplements

VOLINI GEL Pain Relief Gel ANALGESIC-Topical

VOLINI Pain Relief Spray ANALGESIC-Topical

SPRAY

VOLINI ACTIV Herbal Pain Relief Gel ANALGESIC-Topical

GEL

VOLINI ACTIV Herbal Pain Relief Spray ANALGESIC-Topical

SPRAY

ABZORB Clotrimazole 1% Dusting Powder Antifungal Dusting Powder

PEPFIZ Effervescent Digestive Enzymes GI-Gastrointestinal

GARLIC Garlic Oil Cholesterol control

PEARLS

OLESAN OIL Nasal decongestant CCA-Cough, Cold & Allergy

Top Brand of SUN PHARMA

 REVITAL
 VOLINI GEL

24
Geographical Spread : Internationally, the Company has a strong presence in the US,

emerging markets, Western Europe, Japan, Canada, Israel, Australia

and New Zealand (A&NZ). It has multiple production units approved

by various regulatory authorities, including the USFDA.

Sun Pharma is among the top 10 consumer healthcare companies

in India, Romania, Nigeria and Myanmar. It is also ranked No. 1

in the Romania OTC market. The Company’s major markets are

India, Russia, Romania, Nigeria, South Africa and Myanmar. It also

has significant presence in Ukraine, Poland, Belarus, Kazakhstan,

Thailand, Morocco and UAE, where it is scaling up at a steady pace.

Sun Pharma owns 42 manufacturing units, spanning six continents.

The production units are located in India the US, Russia, Canada,

Hungary, Israel, Bangladesh, Romania, Nigeria, South Africa, Malaysia

and Australia.

Advertisement and Branding:

Sun Pharma follows a very strong promotional and marketing activity in its marketing mix and
focusses on reaching the customers everywhere. Their Tagline depicts the intentions of the
company and attracts the people. They carry out various television ads ad also spreads awareness
through print medias. The Sun Pharma company stresses on niche segment like psychiatry and
lifestyle meds etc helping it to grow fourfold to have a revenue. Sun Pharma have also earned
awareness through various sponsoring programmes and hoardings etc. they also come up with

25
attractive offers and schemes on meeting the described sales to its agents and distributors. This
completes an insight into Sun Pharma Branding.

In Advertisement Sun Pharma has signed Akshya Kumar and Virat Koli as Brand Ambassador.

Ratios Interpretation:

1.Current Ratio

Year 2016 2017 2018

Ratio 0.616214 0.582723 0.564179005

Current Ratio
0.63
0.62
0.61
0.6
0.59 Current Ratio
0.58
0.57
0.56
0.55
0.54
0.53
2015-16 2016-17 2017-18

A ratio under 1 indicates that a company’s liabilities are greater than its assets and suggests that
the company in question would be unable to pay off its obligations if they came due at that point.

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While a current ratio below 1 shows that the company is not in good financial health, it does not
necessarily mean that it will go bankrupt.

2.Liquid Ratio:

Year 2016 2017 2018

Ratio 0.369074 0.372165 0.389748348

Liquid Ratio
0.4
0.39
0.38 Liquid Ratio

0.37
0.36
0.35
2015-16 2016-17 2017-18

Liquidity ratios are most useful when they are used in comparative form. This analysis may be
internal or external. For example, internal analysis regarding liquidity ratios involves using
multiple accounting periods that are reported using the same accounting methods. Comparing
previous time periods to current operations allows analysts to track changes in the business. In
general, a higher liquidity ratio shows a company is more liquid and has better coverage of debts
outstanding
3.Debt to Equity Ratio:

Year 2016 2017 2018

Ratio 0.2584 0.229134 0.342866248

Given that the debt/equity ratio measures a company’s debt relative to the total value of its stock,
it is most often used to gauge the extent to which a company is taking on debt as a means
of leveraging. A high debt/equity ratio generally means that a company has been aggressive in

27
financing its growth with debt. Aggressive leveraging practices are often associated with high
levels of risk. This may result in volatile earnings as a result of the additional interest expenses.

Debt to Equity Ratio

0.4
0.3 Debt to Equity
Ratio
0.2
0.1
0
2015-16 2016-17 2017-18

4. Gross Profit:

Year 2016 2017 2018

Ratio -12.669707 -0.20221 4.743687498

Gross Profit Ratio

6
4
2
0 Gross Profit Ratio
-2 2015-16 2016-17 2017-18
-4
-6
-8
-10
-12
-14

There are several layers of profitability that analysts monitor to assess the performance of a
company, including gross profit, operating profit and net income. Each level provides
information about a company's profitability. Gross profit the first level of profitability, tells
analysts how good a company is at creating a product or providing a service compared to its
competitors. Gross profit margin, calculated as gross profit divided by revenues, allows analysts
to compare business models with a quantifiable metric.

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4.Net Profit

Year 2016 2017 2018

Ratio -13.6294 -0.27491 -5.449643221

Net Profit Ratio (%)

0
-2 2015-16 2016-17 2017-18
-4
Net Profit Ratio (%)
-6
-8
-10
-12
-14
-16

Net profit is equal to net income or profits divided by total revenue and represents how much
profit each dollar of sales generates. Net profit is the ratio of net profits or net income
to revenues for a company, business segment or product. Net profit is typically expressed as a
percentage but can also be represented in decimal form. The net profit margin illustrates how
much of each dollar collected by a company as revenue translates into profit. The term "net
profits" is equivalent to "net income" on the income statement and one can use the terms
interchangeably. Most commonly, investors will refer to net profit as the "net margin" and
describe it as "net income" divided by total sales instead of using the term "net profits."

5.Return on Equity Ratio

Year 2016 2017 2018

Ratio -4.90327 -0.1087 -2.501707123

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 Return on Equity Ratio
0
-1 2015-16 2016-17 2017-18 Return on
-2 Equity Ratio
-3
-4
-5
-6

Return on Equity is useful in comparing the profitability of a company to that of other firms in
the same industry. It illustrates how effective the company is at turning the cash put into the
business into greater gains and growth for the company and investors. The higher the return on
equity, the more efficient the company's operations are making use of those funds.

6. Return on Capital Employed Ratio

Year 2016 2017 2018

Ratio -3.62207 -0.06505 1.621629766

Return on Capital Employed Ratio

2

1
Return on
0 Capital
2015-16 2016-17 2017-18 Employed
-1 Ratio (ROI)

-2

-3

-4

ROCE is a useful metric for comparing profitability across companies based on the amount of
capital they use. There are two metrics required to calculate the Return on Capital Employed -
earnings before interest and tax and capital employed. Earnings before interest and tax (EBIT),

30
also known as operating income, shows how much a company earns from its operations alone
without regard to interest or taxes. EBIT is calculated by subtracting cost of goods sold and
operating expenses from revenues.

Capital employed is the total amount of capital that a company has utilized in order to generate
profits. It is the sum of shareholders' equity and debt liabilities. Also, it can be simplified as total
assets minus current liabilities. Instead of using capital employed at an arbitrary point in time,
analysts and investors often calculate ROCE based on the average capital employed, which takes
the average of opening and closing capital employed for the time period.

7.Earnings Per Share (EPS):

Year 2016 2017 2018

Ratio -8.1129365 -0.17504 -3.790381733

Earnings Per Share (EPS)

0
-2 2015-16 2016-17 2017-18 Earnings Per
Share (EPS)
-4
-6
-8
-10

Earnings per share (EPS) is generally considered to be the single most important variable in
determining a share's price. It is also a major component used to calculate the price-to-
earnings (P/E) valuation ratio, where the 'E' in P/E refers to EPS. By dividing a company's share
price by its earnings per share, an investor can understand the fair market value of a stock in
terms of what the market is willing to pay based on a company's current earnings.

8.P/E Ratio(Price to Earnings Ratio):

Year 2016 2017 2018

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Ratio 4.5 -0.1 -2.1

P/E Ratio(Price to Earnings Ratio)

5
4
3 P/E Ratio(Price
2 to Earnings
Ratio)
1
0
-1 2015-16 2016-17 2017-18
-2
-3

The price to earnings ratio indicates the expected price of a share based on its earnings. As a
company’s earnings per share being to rise, so does their market value per share. A company with
a high P/E ratio usually indicated positive future performance and investors are willing to pay
more for this company’s shares. In case of Sun Pharma in 2016 it should great potential but then
started falling down.

9. Fixed Assests Turnover Ratio:

Fixed Assets Turnover Ratio

0.4
0.3 Fixed
0.2 Assets
0.1 Turnover
0 Ratio

A higher ratio is indicative of greater efficiency in managing fixed-asset investments, but there is
not an exact number or range that dictates whether a company has been efficient at generating
revenue from such investments. In case of Sun Pharma it is growing year by year.

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10. Sales to Working Capital

Year 2016 2017 2018

Ratio -2.3785034 -1.81623 -1.700841646

Sales to Working Capital

0
-0.5 2015-16 2016-17 2017-18 Sales to Working
-1 Capital

-1.5
-2
-2.5

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Observations & Findings
Sun Pharma is loss making company . But it is a leading company in India and also they are
spending more on R&D and also they are aming at future growth. They are Enhancing the
productivity of domestic business and strengthing leadership in hyper-competitive landscape.

Conclusion
We learn how to do fundamental analysis and how to see parameters of company while investing
and also how to read and interpretat annul report

In this we also learn how interpretat financial of company.

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Bibliography :
1. Company’s Annual Report
2. Money Control
3. Economic times
4. MBA classroom

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