Sun Pharma, the country?s second-largest drugmaker in terms of net sales, has pipped its peers in market capitalisation (m-cap). On October 11, Sun Pharma had an M-cap of Rs 42,863 crore, which is almost double of the market capitalisation of its closest peer Cipla, number one drugmaker in terms of sales as of quarter ending June this fiscal.
According to analysts, Sun Pharma had got a shot in the arm when an Israeli court ruled in its favour to conclude its tender offer for all outstanding shares of Taro Pharmaceuticals Industries at a price of $7.75 per share in cash, ending nearly a three-and-a-half year old legal battle. ?Sun Pharma had posted an above average growth in its domestic sales to become the number two drugmaker as on June 30. (this fiscal). It also had a strong Anda (abbreviated new drug application) pipeline pending with various regulators including the FDA. The Taro acquisition is expected to strengthen the company’s position in the US market further. It would also give the company a leg up in its generic business in Canada as well as in Israel, Taro’s home turf?, an analyst tracking the stock told FE. The management has guided for a 20% growth in its net sales for the current quarter, which analysts say better the sectoral earning guidance.
According to the information available with FE, Sun Pharma, as of the end of trade on October 11, had a market capitalisation of Rs 42,863 crore, which is almost double the market capitalisation of Cipla, the country’s largest drugmaker with a standalone net sales of Rs 1,427.38 crore as on June 30. Cipla had a market capitalisation of Rs 27,219 crore as of the end of the trading day on Monday. The Hyderabad-based Dr Reddy’s came a distant third with a M-Cap of Rs 26,534 crore followed by Ranbaxy (Rs 25,211 crore) and the Indian arm of the global big pharma company, GlaxoSmithkline Pharamceuticals with a M-Cap of Rs 19,244 crore.
In a recent company update, brokerage house Angel Broking had said Sun Pharma has one of the strongest balance sheets in the sector, with cash of around Rs 4,000 crore which translates roughly into 11% of its market capitalisation. The management is open to use this war chest to fuel inorganic growth and is scouting for acquisitions, particularly in the US, it said. The company has a paid up capital base of Rs 103.56 crore and an earning per share of (EPS) of Rs 27.20.
