sun pharmaceuticals (sunpha) 568 -...
TRANSCRIPT
February 15, 2018
ICICI Securities Ltd | Retail Equity Research
Result Update
Taro drags Q3 but ex-Taro margins improve…
Revenues declined 16% YoY to | 6653 crore (I-direct estimate:
| 6907 crore) due to 38% YoY decline in the US to | 2125 crore (I-
direct estimate: | 2189 crore) due to the high base of gGleevec and
gBenicar and dismal performance of Taro’s sales. India sales grew
6% YoY to | 2125 crore (I-direct estimate: | 2189 crore)
EBITDA margins declined to 21.8% (I-direct estimate: 21.5%) against
31.0% in Q3FY17, due to high base, pricing pressure in the US and
decline in Taro’s margins (42.5% vs. 60.2% in Q3FY17)
Adjusted net profit declined 75% to | 364 crore (I-direct estimate:
| 957 crore). Change vis-à-vis EBITDA was owing to lower other
income and | 513 crore of one-off tax expenses due to re-
measurement of group deferred tax assets
US business still key lever for growth but environment challenging
The US business, which constitutes ~45% of turnover, has grown at 8%
CAGR in FY13-17, on the back of acquisitions like Caraco, Taro, Dusa, URL
and timely product launches. US product basket remains robust - 418
ANDAs filed and 126 pending approvals. Some niche launches include
Lipodox (Doxil), Doxycycline, Nystatin, etc, besides complex/limited
competition products and plain vanilla generics. US growth has also been
backed by extensive infrastructure with 41 global manufacturing facilities.
Ranbaxy Acquisition Synergy - Ranbaxy’s stronghold in fast growing
emerging markets (50% of Ranbaxy's sales) is likely to complement Sun’s
presence in this space. Regarding US, Sun is looking for a leadership
position in the niche generic derma space and also to enter branded and
OTC segments. In the domestic space, the acquisition is likely to provide
more therapeutic diversification and improve its market share in key
segments. Domestic market share has substantially improved to 8.9%
from 5.5% with leadership in as many as 11 therapies. The management
has maintained the synergy guidance of US$300 million by FY18.
However, warning letters to Karkhadi, Halol and acute pricing pressure in
the US base business are major challenges. Due to a challenging
environment in the generics front the management plans to diversify into
specialty products such as Tildrakizumab (dermatology), BromSite,
Seciera (both ophthalmic) and Odomzo (oncology), etc.
We expect the US business to decline at a CAGR of 12% to | 9529 crore
in FY17-20E due to high base and sharp price erosion in base business
besides delay in Halol resolution. Indian formulations will likely grow at a
CAGR of 11% to | 10684 crore in FY17-20E backed by new launches and
price hikes.
Progress of speciality pipeline likely to be key driver
Q3 was impacted by the sharp fall in Taro’s financials. However, ex Taro’s
base business, margins improved mainly due to cost rationalisation and
forex elements. The management has maintained its guidance of 20-22%
EBITDA margins. However, as per their own assertion (and going by the
run rate of 9M), guidance for single digit revenue decline is most likely to
be missed. Broadly, the challenges persist on the generics pricing front in
the base business. Unlike other generic players, the approval momentum
is slightly slow in Sun’s case, mainly due to pending Halol resolution.
However, progress in the speciality portfolio is promising, which is the
key differentiator vis-à-vis peers. We maintain HOLD rating with a new
target price of | 530 based on 22x FY20E EPS of | 22.4 and | 38 NPV for
Tildrakizumab.
Rating matrix
Rating : Hold
Target : | 530
Target Period : 12-15 months
Potential Upside : -7%
What’s Changed?
Target Changed from | 445 to | 530
EPS FY18E Changed from | 15.2 to | 12.2
EPS FY19E Changed from | 18.4 to | 18.6
EPS FY20E Changed from | 22.7 to | 22.4
Rating Unchanged
Quarterly Performance
Q3FY18 Q3FY17 YoY (%) Q2FY18 QoQ (%)
Revenue 6,653.2 7,912.7 -15.9 6,650.3 0.0
EBITDA 1,453.4 2,453.1 -40.8 1,375.6 5.7
EBITDA (%) 21.8 31.0 -916 bps 20.7 116 bps
Adj. Net Profit 364.4 1,471.8 -75.2 912.1 -60.0
Key Financials
(| Crore) FY17 FY18E FY19E FY20E
Net Sales 31578.4 26265.2 28841.7 31729.2
EBITDA 10089.3 5444.0 6460.9 7380.9
Adj. Profit 6964.4 2925.8 4472.3 5376.8
Adj. EPS (|) 29.0 12.2 18.6 22.4
Valuation summary
FY17 FY16 FY19E FY20E
PE (x) 19.6 27.6 30.5 25.3
EV to EBITDA (x) 13.0 15.0 19.6 16.8
Price to book (x) 3.7 4.4 3.2 2.9
RoNW (%) 19.0 18.0 10.7 11.6
RoCE (%) 20.3 18.6 12.4 13.7
Stock data
Particular
Market Capitalisation
Debt (FY17)
Cash & Cash Equivalents (FY17)
EV (| Cr)
52 week H/L (|) 729/433
Equity capital
Face value | 1
| 129564 crore
| 239.9 crore
Amount
| 136278 crore
| 9828 crore
| 16542 crore
Price performance (%)
1M 3M 6M 1Y
Aurobindo Pharma -8.8 -13.1 -14.7 -7.2
Sun Pharma -0.5 10.3 23.8 -10.0
Lupin -9.5 -0.4 -13.9 -41.5
Dr Reddy's -10.3 -5.4 9.6 -24.8
Research Analyst
Siddhant Khandekar
Mitesh Shah
Harshal Mehta
Sun Pharmaceuticals (SUNPHA) | 568
ICICI Securities Ltd | Retail Equity Research Page 2
Variance analysis
Q3FY18 Q3FY18E Q3FY17 Q2FY18 YoY (%) QoQ (%) Comments
Revenue 6,653.2 6,907.6 7,912.7 6,650.3 -15.9 0.0
YoY decline mainly due to 38% YoY decline in the US to | 2125 crore (I-direct
estimate: | 2189 crore) led by high base of gGleevec, gBenicar and weak Taro
sales
Raw Material Expenses 2,099.7 1,934.1 2,248.7 1,877.5 -6.6 11.8 314 bps decline in gross margins to 68.4% mainly due to sharp decline in Taro's
gross margins and adverse product mix
Employee Expenses
1,372.6 1,347.0 1,215.1 1,323.3 13.0 3.7 YoY increase mainly due to expansion of specialty team in the US and
consolidation of Biosintez in Russia
Other Expenditure 1,727.5 2,141.4 1,995.8 2,073.9 -13.4 -16.7 YoY decline mainly due to forex elements and rationalisation of cost
Total Expenditure 5,199.9 5,422.5 5,459.5 5,274.7 -4.8 -1.4
EBITDA 1,453.4 1,485.1 2,453.1 1,375.6 -40.8 5.7
EBITDA (%)
21.8 21.5 31.0 20.7 -916 bps 116 bps YoY decline mainly due to a high base, pricing pressure in the US and decline in
Taro’s margins. Taro Pharma’s EBITDA margins declined to 42.5% from 60.2% in
Q3FY17
Interest 95.3 157.4 166.5 157.4 -42.7 -39.4 Volatility mainly due to forex element
Depreciation 339.3 358.7 306.8 358.7 10.6 -5.4
Other income 129.2 264.7 122.2 254.8 5.8 -49.3 Volatility mainly due to forex element
EO 0.0 0.0 0.0 0.0 NA NA
PBT 1,147.9 1,233.7 2,102.0 1,114.3 -45.4 3.0
Tax 748.7 123.4 372.9 111.4 100.8 572.1
MI 34.8 93.1 250.0 89.7 -86.1 -61.2
Net Profit 365.4 1,027.3 1,471.8 912.1 -75.2 -59.9
Adj. Net Profit 364.4 1,017.3 1,471.8 912.1 -75.2 -60.0 Change vis-à-vis EBITDA and I-direct estimates owing to lower other income and
| 513 crore of one-off tax expenses due to re-measurement of group deferred tax
assets
Key Metrics
India formulations 2,085.0 2,264.8 1,969.4 2,221.0 5.9 -6.1 Miss vis-à-vis I-direct estimates was mainly due to lower-than expected
restocking post GST implementation
US formulations 2,124.2 2,189.3 3,419.3 1,986.2 -37.9 6.9 YoY sharp decline mainly due to high base of gGleevec and gBenicar, price
erosion in base business and sharp decline in Taro's sales
Emerging Markets 1,221.2 1,272.9 1,159.9 1,258.2 5.3 -2.9 Included consolidation of JSC Biosintez acquisition in Russia
RoW 776.6 745.0 760.3 711.3 2.2 9.2 Included consolidation of acquisition in Japan
APIs 391.3 373.0 365.7 413.4 7.0 -5.4
Source: Company, ICICIdirect.com Research
Change in estimates
(| Crore) Old New % Change Old New % Change
Total Operating Income 26,650.3 26,265.2 -1.4 29,378.8 28,841.7 -1.8
EBITDA 5,643.1 5,444.0 -3.5 6,521.5 6,460.9 -0.9
EBITDA Margin (%) 21.2 20.7 -47 bps 22.2 22.4 20 bps
Adjusted PAT 3,647.1 2,925.8 -19.8 4,425.6 4,472.3 1.1 Decline in FY18 mainly due to | 513 crore of one-off tax expenses due to
re-measurement of group deferred tax assets
EPS (Adjusted) 15.2 12.2 -19.8 18.4 18.6 1.3
FY18E FY19E
Source: Company, ICICIdirect.com Research
Assumptions
| crore FY16 FY17 FY18E FY19E FY18E FY19E
Indian Formulations 7,299.2 7,749.1 8,174.7 9,539.3 8,450.4 9,848.0
US Formulations 13,516.9 13,758.8 8,476.9 8,757.1 8,619.7 9,056.4
RoW markets 5,746.1 7,128.0 7,854.5 8,639.9 7,830.6 8,613.6
APIs 1,475.2 1,634.5 1,540.5 1,665.3 1,522.3 1,610.1
Current Earlier
Source: Company, ICICIdirect.com Research
ICICI Securities Ltd | Retail Equity Research Page 3
Company Analysis
Established in 1983, Sun Pharma is the largest Indian pharmaceutical
company both in terms of market capitalisation and turnover (FY17).
The company manufactures and markets a large basket of pharmaceutical
formulations in India, the US and several other markets across the world.
However, US and Indian formulations are by far the core strengths and
growth drivers for the company. The company has ~50 manufacturing
sites across the world. The US business has been built mostly on
acquisitions and generic focus. It owns the largest product basket among
Indian players with as many as 558 product (ANDA) filings. In Indian
formulations, the company is a leader in niche therapy areas of
psychiatry, gastroenterology, neurology, cardiology, nephrology,
orthopaedics and ophthalmology.
The company completed the $3.2 billion acquisition of Ranbaxy
Laboratories after almost a year of navigating the regulatory gauntlet to
create the world’s fifth-largest generic pharmaceutical company by
revenue. The company has planned a capex of US$250 million for
Tildrakizumab, the IL-23 monoclonal anti-body in-licensed from MSD (US)
over four or five years to be utilised for its psoriasis trials. The company
has guided for filing of Investigational IL-23p19 inhibitor, Tildrakizumab, in
FY19.
Sun acquired Odomzo (oncology) from Novartis in December, 2016, for
$175 million and additional milestones payments. USFDA approved this
in July, 2015 for treatment of locally advanced basal cell cancer and is the
first branded oncology product for Sun Pharma in the US. Total 70% who
prescribe are dermatologists while the rest are oncologists for this drug.
Seciera (for dry eyes disease), which was acquired from Ocular
Technologies, has shown promising phase III results. The company will
enter into dialogue with FDA regarding further course of action for the
product.
A snapshot of the galloping performance in the last four years - sales
grew at ~41% CAGR to | 31578 crore, EBIDTA grew at CAGR of ~39% to
| 10089 crore. Adjusted PAT grew at a CAGR of ~33% to | 10089 crore.
Going ahead, we expect revenues to remain flat in FY17-20E to | 31729
crore after considering the Ranbaxy acquisition.
Exhibit 1: Revenues to remain flat in FY17-20E
8,011.6
11,299.9
16,080.4
28,563.0
31,578.4
26,265.2
28,841.7
31,729.2
0
5000
10000
15000
20000
25000
30000
35000
FY13 FY14 FY15 FY16 FY17 FY18E FY19E FY20E
(| crore)
Total Operating Income
Source: Company, ICICIdirect.com Research
40.9% CAGR 0.2% CAGR
ICICI Securities Ltd | Retail Equity Research Page 4
The US business, which constituted ~45% of the turnover (FY17), has
grown at a CAGR of 8% in FY13-17 on the back of successful acquisitions
such as Caraco and Taro (recently Dusa, URL) and timely product
launches (recent gGleevec launch under exclusivity). The US product
basket remains robust - 558 ANDAs filed, 422 approvals received, some
niche launches include Lipodox/Doxil (~US$150 million), Doxycycline
(~US$100 million), Nystatin (~US$90 million), etc, besides
complex/limited competition products and plain vanilla generics. US
growth is also being backed by extensive infrastructure. Out of the ~50
global manufacturing facilities, ~20 have been approved by the USFDA.
The only blot in an otherwise smooth journey is the warning letter to the
Halol plant. We expect the US business to decline at a CAGR of 12% to
| 9529 crore in FY17-20E due to high base and sharp price erosion in
base business.
Exhibit 2: US business to decline at CAGR of 15% in FY17-20E
10,054.9
13,324.2 13,719.6 13,516.9 13,758.8
8,476.9 8,757.1
9,528.6
0
2000
4000
6000
8000
10000
12000
14000
16000
FY13 FY14 FY15 FY16 FY17 FY18E FY19E FY20E
(| c
rore
)
US
Source: Company, ICICIdirect.com Research
Indian formulations, which form 26% of the turnover (FY17), have grown
at a CAGR of 27% in FY13-17. With a market share of 8.5%, the company
is ranked No. 1 in domestic formulations. The acute, chronic and sub-
chronic segments were at 41%, 46% and 14% of revenues, respectively.
It is a leader in three therapeutic categories. Indian formulation growth
was unaffected despite NLEM 2011 implementation vagaries and channel
disturbances due to trade margin issues with wholesalers/distributors. We
expect Indian formulations to grow at a CAGR of 11% to | 10684 crore in
FY17-20E backed by new launches and price hikes.
8.2% CAGR -11.5% CAGR
ICICI Securities Ltd | Retail Equity Research Page 5
Exhibit 3: India sales to grow at CAGR of 11% in FY17-20E
2,965.7
3,691.8
6,716.6
7,299.27,749.1
8,174.7
9,539.3
10,684.0
0
2000
4000
6000
8000
10000
12000
FY13 FY14 FY15 FY16 FY17 FY18E FY19E FY20E(|
crore)
Domestic
Source: Company, ICICIdirect.com Research
Exhibit 4: Sales from RoW markets to grow at CAGR of 10% in FY17-20E
1,527.11,908.4
6,064.65,746.1
7,128.0
7,854.5
8,639.9
9,503.9
0
2000
4000
6000
8000
10000
FY13 FY14 FY15 FY16 FY17 FY18E FY19E FY20E
(|
crore)
ROW
Source: Company, ICICIdirect.com Research
27.1% CAGR
11.3% CAGR
47.0% CAGR
10.1% CAGR
ICICI Securities Ltd | Retail Equity Research Page 6
Exhibit 5: Sales from API business to remain flat in FY17-20E
754.9801.0
1,070.2
1,475.2
1,634.5
1,540.5
1,665.3
1,748.6
0
200
400
600
800
1000
1200
1400
1600
1800
2000
FY13 FY14 FY15 FY16 FY17 FY18E FY19E FY20E(|
crore)
API & Others
Source: Company, ICICIdirect.com Research
Exhibit 6: EBITDA to decline at CAGR of 10% in FY17-20E
3258.0
4967.2
7195.6
8724.3
10089.3
5444.0
6460.9
7380.9
40.7
44.0 44.7
30.5
31.9 20.7
22.4 23.3
-
5.0
10.0
15.0
20.0
25.0
30.0
35.0
40.0
45.0
50.0
0
2000
4000
6000
8000
10000
12000
FY13 FY14 FY15 FY16 FY17 FY18E FY19E FY20E
(| c
rore
)
EBITDA EBITDA margins (%)
Source: Company, ICICIdirect.com Research
Exhibit 7: Net profit to decline at CAGR of 8% in FY17-20E
2,587.3
3,008.1 3,204.4
4,967.5
6,964.4
1,975.3
4,472.3
5,376.8
32.3
26.6
19.9
17.4
22.1
7.5
15.5 16.9
-
5.0
10.0
15.0
20.0
25.0
30.0
35.0
0
1000
2000
3000
4000
5000
6000
7000
8000
FY13 FY14 FY15 FY16 FY17 FY18E FY19E FY20E
(| c
rore
)
PAT Net Profit Margins (%)
Source: Company, ICICIdirect.com Research
21.3% CAGR
2.3% CAGR
ICICI Securities Ltd | Retail Equity Research Page 7
Exhibit 8: Trends in return ratios
27.8
34.3 34.3
18.8 18.6 20.3
10.5 12.4 21.3 21.3
17.0 18.6 18.0
19.0
7.6
10.7
0
5
10
15
20
25
30
35
40
FY13 FY14 FY15 FY16 FY17 FY18E FY19E FY20E
(| crore)
RoCE(%) RoNW (%)
Source: Company, ICICIdirect.com Research
SWOT Analysis
Strengths - Above average profitability margins, healthy return ratios
despite higher cash component, one of the first companies to identify
potential of innovative R&D and generic R&D, robust infrastructure to
scale up US business, India business built around chronic focus, one of
the few companies defying the slowdown in Indian formulations.
Weakness - Pending Ranbaxy compliance issues.
Opportunities - The US generics space, the biosimilars space where Sun
is yet to make meaningful foray.
Industry specific threats - Increased USFDA scrutiny across the globe
regarding cGMP issues, pricing pressure due to client consolidation in the
US, pricing probe by the Department of Justice (DoJ) in the US.
Company specific threats - The Halol facility has received a warning letter
from the USFDA, which is yet to be resolved. A relatively smaller Karkhadi
facility also received a warning letter (and import alert), which is also
pending for resolution.
ICICI Securities Ltd | Retail Equity Research Page 8
Exhibit 9: Trends in quarterly financials
(| Crore) Q3FY16 Q4FY16 Q1FY17 Q2FY17 Q3FY17 Q4FY17 Q1FY18 Q2FY18 Q3FY18 YoY (%) QoQ (%)
Total Operating Income 7122.3 7654.3 8256.3 8265.1 7912.7 7137.0 6208.8 6650.3 6653.2 -15.9 0.0
Raw Material Expenses 1732.8 1408.6 1847.0 1839.9 2248.7 2195.2 1677.4 1877.5 2099.7 -6.6 11.8
Gross Profit Margin (%) 75.7 81.6 77.6 77.7 71.6 69.2 73.0 71.8 68.4
Employee Expenses 1137.7 1187.0 1239.3 1199.1 1215.1 1248.8 1329.9 1323.3 1372.6 13.0 3.7
% of Revenue 16.0 15.5 15.0 14.5 15.4 17.5 21.4 19.9 20.6
Other Expenditure 2006.2 2786.8 2249.0 2058.4 1995.8 2145.5 2105.9 2073.9 1727.5 -13.4 -16.7
% of Revenue 28.2 36.4 27.2 24.9 25.2 30.1 33.9 31.2 26.0
Total Expenditure 4876.7 5382.4 5335.3 5097.4 5459.5 5589.5 5113.1 5274.7 5199.9 -4.8 -1.4
% of Revenue 68.5 70.3 64.6 61.7 69.0 78.3 82.4 79.3 78.2
EBITDA 2245.6 2271.9 2921.0 3167.7 2453.1 1547.5 1095.7 1375.6 1453.4 -40.8 5.7
EBITDA Margin (%) 31.5 29.7 35.4 38.3 31.0 21.7 17.6 20.7 21.8
Depreciation 250.9 288.0 316.0 303.8 306.8 338.2 346.6 358.7 339.3 10.6 -5.4
Other Income 172.9 206.0 157.1 119.4 122.2 224.5 152.0 254.8 129.2 5.8 -49.3
Profit before Interest & Tax 2167.7 2189.9 2762.1 2983.3 2268.5 1433.8 901.0 1271.8 1243.3 -45.2 -2.2
Interest 127.6 103.0 134.6 53.7 166.5 45.0 109.4 157.4 95.3 -42.7 -39.4
Less: Exceptional Items 0.0 0.0 0.0 0.0 0.0 0.0 950.5 0.0 0.0 NA NA
PBT 2040.1 2086.9 2627.5 2929.5 2102.0 1388.8 -158.9 1114.3 1147.9 -45.4 3.0
Total Tax 88.8 417.6 352.7 441.7 372.9 44.3 161.8 111.4 748.7 100.8 572.1
PAT 1951.3 1669.3 2274.8 2487.9 1729.1 1344.5 -320.7 1002.9 399.2 -76.9 -60.2
Minority Interest 394.8 246.7 234.0 236.0 250.0 161.9 102.3 89.7 34.8 -86.1 -61.2
PAT after MI 1556.4 1422.7 2040.8 2251.9 1479.1 1182.7 -423.0 913.2 364.4 -75.4 -60.1
EPS (|) 6.5 5.9 8.5 9.4 6.2 4.9 -1.8 3.8 1.5 -75.4 -60.1
Share Capital (cr) 239.9 239.9 239.9 239.9 239.9 239.9 239.9 239.9 239.9
Source: Company, ICICIdirect.com Research
ICICI Securities Ltd | Retail Equity Research Page 9
Conference call highlights
The management has reiterated its EBITDA guidance of 20-22%
for FY18. However, it expects revenue guidance of high single
digit in FY18 to be missed marginally
The company has launched gCoreg CR (CVS) in the US. As of
now, it is the only generic approved for this product
USFDA accepted the company’s NDA for dry eye candidate, OTX-
101
The management does not see any improvement in pricing
scenario in the US generic space. It expects pricing pressure in
the US generics space is product specific and not for the entire
segment
The company has recovered most of the deferred US sales of Q3
during the quarter
For Tildrakizumab, it continues to expect the BLA approval in US
in FY19. PADUFA date for this is end of March 2018
US Filing for Tildrakizumab will be done by Merck. The initial
supplies for market also will come from the Merck, till Sun
relocates manufacturing to another supplier. However, post
approval it will be Sun’s product. The field force Recruitments for
this product is also going on
As per IMS, Absorica prescriptions have declined mainly due to
significant correction in co-pay programme
Major chunk of Odomzo sales is emanating from oncologists. The
company is trying to leverage its derma field force to improve
coverage in the prescriptions it will get from the dermatologist
Taro’s results highlight
Taro’s revenues declined 30% YoY to US$156 million in the
backdrop of persistent competition and a challenging pricing
environment despite an increase in overall volumes. EBITDA
margins contracted to 42.5% from 60.2% in Q3FY17
Taro’s net profit declined 87% YoY to US$18. Excluding the
impact of the aforementioned one-time tax re-measurement, net
profit was at US$54.8 million
Forex gain was US$3.7 million due to strengthening of the
Canadian dollar versus the US dollar
ICICI Securities Ltd | Retail Equity Research Page 10
Exhibit 10: Trends in return ratios
Location Segmant Regulatory Approvals
Samba J&K Formulations
Jammu, J&K Formulations
Baddi Himachal Prdesh Formulations
Batamandi, Himachal Pradesh Formulations
Mohali, Punjab Formulations
Paonta Sahib, Himachal Pradesh Formulations
Taonsa, Punjab API
Sikkim Formulations
Guwahati, Assam Formulations
Malanpur, Madhya Pradesh API
Dewas, Madhya Pradesh Formulations
Halol, Gujarat Formulations USFDA, UKMHRA
Baska, Gujrat Formulations
Karkhadi, Gujrat Formulations, API USFDA, EU GMP
Ankleshwar, Gujrat API ISO 9002, WHO GMP
Panoli, Gujarat API USFDA, TGA, EU GMP, DKMA
Ahmadnagar, Maharashtra API USFDA, EU GMP
Dadra, Dadra & Nagar Haveli Formulations USFDA
Silvassa, Dadra & Nagar Haveli Formulations
Goa Formulations
Madhuramthakam, Tamil Nadu API ISO 9002, WHO GMP
Sungai Patani, Malasia Formulations
Dhaka, Bangladesh Formulations
Be-Tabs, South Africa Formulations
Lagos, Nigeria Formulations
Morocco, Africa Formulations
Egypt, Africa Formulations
Haifa, Isreal Formulations USFDA
Terapia S.A., Cluj, Romania Formulations
Tiszavasvari, Hungary Formulations USFDA, EU GMP
Cashel, Isreal Formulations
Jardin Pompeia, Brazil Formulations
Soa Paolo, Brazil Formulations
Del. Iztapalapa, Mexico Formulations
Chattanooga, TN, USA API USFDA
Philladelphia, PA, USA Formulations USFDA
Wilmington, MA, USA Formulations USFDA
Cranbery, New Jersey, USA Formulations USFDA
New Brunwick, NJ, USA Formulations
North Brunswick, NJ, USA Formulations
Brampton, Canada Formulations USFDA
Detriot, MI, USA Formulations USFDA
Chicago, IL, USA Formulations USFDA
Source: Company, ICICIdirect.com Research
ICICI Securities Ltd | Retail Equity Research Page 11
Valuation
Q3 was impacted by the sharp fall in Taro’s financials. However, ex Taro’s
base business, margins improved mainly due to cost rationalisations and
forex elements. The management has maintained guidance for 20-22%
EBITDA margins. However, as per their own assertion (and going by the
run rate of 9M), guidance for single digit revenue decline is most likely to
be missed. Broadly, the challenges persist on the generics pricing front in
the base business. Unlike other generic players, the approval momentum
is slightly slow in Sun’s case, mainly due to pending Halol resolution.
However, progress in the speciality portfolio is promising, which is the
key differentiator vis-à-vis peers. We maintain HOLD with a new target
price of | 530 based on 22x FY20E EPS of | 22.4 and | 38 NPV for
Tildrakizumab.
Exhibit 11: One year forward PE
0.0
500.0
1000.0
1500.0
2000.02/14/201
1
8/14/201
1
2/14/201
2
8/14/201
2
2/14/201
3
8/14/201
3
2/14/201
4
8/14/201
4
2/14/201
5
8/14/201
5
2/14/201
6
8/14/201
6
2/14/201
7
8/14/201
7
2/14/201
8
(|)
Sun Pharma 60.9x 54.2x 42.9x 33.9x 29.4x[
Source: Bloomberg, ICICIdirect.com Research
Exhibit 12: One year forward PE of company vs. CNX Pharma
0.00
20.00
40.00
60.00
80.00
100.00
2/14/201
1
8/14/201
1
2/14/201
2
8/14/201
2
2/14/201
3
8/14/201
3
2/14/201
4
8/14/201
4
2/14/201
5
8/14/201
5
2/14/201
6
8/14/201
6
2/14/201
7
8/14/201
7
2/14/201
8
(x)
Sun Pharma CNX Pharma
19% Premium
Source: Bloomberg, ICICIdirect.com Research
Exhibit 13: Valuation
Revenues Growth EPS Growth P/E EV/EBITDA RoE RoCE
(| crore) (%) (|) (%) (x) (X) (%) (%)
FY17 31578 10.6 29.0 23.2 19.6 13.0 19.0 20.3
FY17E 26265 -16.8 12.2 -58.0 69.0 23.6 7.6 10.5
FY19E 28842 9.8 18.6 52.9 30.5 19.6 10.7 12.4
FY20E 31729 10.0 22.4 20.2 25.3 16.8 11.6 13.7
Source: Company, ICICIdirect.com Research
ICICI Securities Ltd | Retail Equity Research Page 12
Recommendation history vs. Consensus
0.0
10.0
20.0
30.0
40.0
50.0
60.0
70.0
80.0
90.0
0
200
400
600
800
1,000
1,200
1,400
Feb-18Dec-17Sep-17Jul-17Apr-17Feb-17Dec-16Sep-16Jul-16Apr-16Feb-16Nov-15Sep-15Jul-15Apr-15Feb-15
(%
)(|)
Price Idirect target Consensus Target Mean % Consensus with BUY
Source: Reuters, Company, ICICIdirect.com Research
Key events
Date Event
Jun-09 USFDA seizes more than 33 generic drugs from Caraco for failing to meet FDA cGMP requirements
Aug-10 Manufacturing facility in Cranbury, New Jersey receives warning letter from USFDA
Sep-10 Increases stake in Taro Pharma to 48.7% with voting rights of 65.8%
Apr-11 Forms joint venture with Merck & Co Inc to develop, manufacture and commercialise new combinations, novel formulations and branded generics in emerging
markets
Sep-11 Receives establishment inspection report (EIR) from USFDA for its Cranbury, New Jersey facility
Feb-12 USFDA grants special approval to Sun Pharma to supply short supply oncology product Doxil to the US market
Aug-12 USFDA gives approval to Caraco Pharma’s manufacturing facility & packaging sites to resume production for two drugs
Nov-12 Acquires US based dermatology company Dusa Pharma, which was marketing innovative drug & device Levulan (aminolevulinic acid HCl)
Dec-12 Acquires generic business of URL Pharma from Takeda Pharmaceuticals
Feb-13 Receives final approval for Doxorubicin Hcl Liposome injection (Doxil)
May-14 Karkhadi unit receives warning letter from the USFDA
Sep-14 Halol unit receives Form 483 observation letter from the USFDA
Mar-15 Sun Pharma acquires GSK's Opiates Business in Australia with two Opiates manufacturing facilities in Port Fairy & Latrobe
Apr-15 Completes Ranbaxy merger
Dec-15 Receives warning letter from the USFDA for its Halol manufacturing facility
Feb-16 Launches generic version of Gleevec (Imatinib Mesylate Tablets) in the US. The company has sole 180 days exclusivity for this product
Mar-16 Acquires14 established prescription brands in Japan from Novartis for a cash consideration of US$ 293 million
Dec-16 Halol unit receives Form 483 observations from the USFDA post re-inspection of the plant
May-17 Sun Pharma announces USFDA filing acceptance of biologics license application (BLA) For Tildrakizumab
Source: Company, ICICIdirect.com Research
Top 10 Shareholders Shareholding Pattern
Rank Investor Name Latest Filing Date % O/S PositionPosition Change
1 Shanghvi (Dilip Shantilal) 30-Sep-17 0.10 230.29m 0.00m
2 Viditi Investment Pvt. Ltd. 30-Sep-17 0.08 200.85m 0.00m
3 Tejaskiran Pharmachem Industries Pvt. Ltd. 30-Sep-17 0.08 194.82m 0.00m
4 Family Investment Pvt. Ltd. 30-Sep-17 0.08 182.44m 0.00m
5 Quality Investment Pvt. Ltd. 30-Sep-17 0.08 182.38m 0.00m
6 Life Insurance Corporation of India 30-Sep-17 0.04 104.52m 6.00m
7 Virtuous Finance, Ltd. 30-Sep-17 0.04 96.85m 0.00m
8 Virtuous Share Investment Pvt. Ltd. 30-Sep-17 0.03 83.75m 0.00m
9 ICICI Prudential Asset Management Co. Ltd. 31-Dec-17 0.03 63.58m (1.92)m
10 Aditya Medisales, Ltd. 30-Sep-17 0.02 40.15m 0.00m
(in %) Dec-16 Mar-17 Jun-17 Sep-17 Sep-17
Promoter 54.4 55.0 54.4 54.4 54.4
Others 45.6 45.0 45.6 45.6 45.6
Source: Reuters, ICICIdirect.com Research
Recent Activity
Investor name Value ($) Shares Investor name Value ($) Shares
Shanghvi (Vidhi D) 68.1m 8.8m Harding Loevner LP -39.9m -5.2m
SBI Funds Management Pvt. Ltd. 54.2m 6.1m Franklin Advisers, Inc. -44.0m -4.9m
Life Insurance Corporation of India 46.3m 6.0m ICICI Prudential Asset Management Co. Ltd. -17.1m -1.9m
Desai (Sailesh T) 28.1m 3.7m GIC Private Limited -9.4m -1.2m
Axis Asset Management Company Limited 26.7m 3.0m Fidelity Management & Research (Hong Kong) Limited -9.4m -1.2m
Buys Sells
Source: Reuters, ICICIdirect.com Research
ICICI Securities Ltd | Retail Equity Research Page 13
.
Financial summary
Profit and loss statement | Crore
(Year-end March) FY17 FY18E FY19E FY20E
Revenues 31,578.4 26,265.2 28,841.7 31,729.2
Growth (%) 10.6 -16.8 9.8 10.0
Raw Material Expenses 8,130.7 7,748.0 8,652.5 9,201.5
Employee Expenses 4,902.3 5,410.1 5,941.0 6,580.0
Other Expenditure 8,456.1 7,663.1 7,787.3 8,566.9
Total Operating Expenditure 21,489.2 20,821.2 22,380.8 24,348.3
EBITDA 10,089.3 5,444.0 6,460.9 7,380.9
Growth (%) 15.6 -46.0 18.7 14.2
Depreciation 1,264.8 1,383.9 1,473.3 1,416.5
Interest 399.8 457.5 399.1 349.7
Other Income 623.2 794.8 1,106.0 1,216.8
PBT 9,047.9 4,397.3 5,694.6 6,831.5
Less: Exceptional Items 0.0 950.5 0.0 0.0
Total Tax 1,211.6 1,156.2 854.2 1,024.7
PAT 6,964.4 1,975.3 4,472.3 5,376.8
Minority Interest 881.9 314.1 371.9 433.7
Adjusted PAT 6,964.4 2,925.8 4,472.3 5,376.8
Growth (%) 23.2 -58.0 52.9 20.2
EPS (Adjusted) 29.0 12.2 18.6 22.4
Source: Company, ICICIdirect.com Research
Cash flow statement | Crore
(Year-end March) FY17 FY18E FY19E FY20E
Profit/(Loss) after taxation 6964.4 1975.3 4472.3 5376.8
Depreciation 1264.8 1383.9 1473.3 1416.5
(Inc)/Dec in Current Assets -1421.9 2395.2 -1385.1 -1539.1
(Inc)/Dec in Current Liabilities 453.3 -876.0 768.1 837.8
Others -178.3 457.5 399.1 349.7
CF from operation 7082.2 5336.0 5727.6 6441.7
Purchase of Fixed Assets -3590.4 -1200.0 -1200.0 -1200.0
(Inc)/Dec in Investments -843.7 -2305.4 -2305.4 -2305.4
Others 7044.9 -7.2 -100.4 -71.7
CF from Investing Activities 2610.8 -3512.6 -3605.8 -3577.1
Inc / (Dec) in Loan Funds 837.1 -2000.0 -1000.0 -1000.0
Inc / (Dec) in Equity Capital -2730.8 0.0 0.0 0.0
Dividend and dividend tax -289.7 -337.7 -764.5 -919.1
Other Financial Activities -400.5 -457.5 -399.1 -349.7
CF from Financing Activities -2583.9 -2795.2 -2163.6 -2268.8
Cash generation during the year 7109.2 -971.8 -41.8 595.8
Op bal Cash & Cash equivalents 8031.7 15140.8 14169.1 14127.3
Closing Cash/ Cash Equivalent 15140.8 14169.1 14127.3 14723.1
Free Cash Flow 3491.8 4136.0 4527.6 5241.7
Source: Company, ICICIdirect.com Research
Balance sheet | Crore
(Year-end March) FY17 FY18E FY19E FY20E
Equity Capital 239.9 239.9 239.9 239.9
Reserve and Surplus 36,399.7 38,037.4 41,745.2 46,203.0
Total Shareholders funds 36,639.7 38,277.3 41,985.1 46,442.9
Total Debt 9,827.8 7,827.8 6,827.8 5,827.8
Deferred Tax Liability 461.9 485.0 519.0 555.3
Minority Interest 3,790.9 4,105.0 4,476.9 4,910.6
Other LT Liabitlies & LT Provision 1,341.8 1,408.9 1,507.5 1,613.1
Total Liabilities 52,062.1 52,104.0 55,316.3 59,349.7
Gross Block - Fixed Assets 22,154.5 23,354.5 24,554.5 25,754.5
Accumulated Depreciation 10,015.5 11,399.4 12,872.7 14,289.2
Net Block 12,138.9 11,955.0 11,681.8 11,465.3
Capital WIP 2,801.4 2,801.4 2,801.4 2,801.4
Total Fixed Assets 14,940.3 14,756.4 14,483.1 14,266.6
Investments 1,191.9 3,497.3 5,802.7 8,108.1
Deferred tax assets 5,617.8 5,898.7 6,311.6 6,753.4
Goodwill on Consolidation 5,536.2 5,536.2 5,536.2 5,536.2
LT Loans & Advances & Assets 1,401.2 1,471.3 1,574.3 1,684.5
Cash 15,140.8 14,169.1 14,127.3 14,723.1
Debtors 7,202.6 5,708.8 6,268.9 6,896.4
Loans and Advances 1,019.1 1,070.0 1,144.9 1,225.1
Inventory 6,832.8 5,754.0 6,318.5 6,951.0
Other current assets 2,527.4 2,653.8 2,839.6 3,038.3
Total Current Assets 32,722.8 29,355.8 30,699.1 32,834.0
Creditors 4,395.4 3,211.2 3,526.2 3,879.3
Provisions & other current liability 4,952.8 5,200.4 5,564.4 5,953.9
Total Current Liabilities 9,348.2 8,411.6 9,090.7 9,833.2
Net Current Assets 23,374.6 20,944.1 21,608.4 23,000.8
Application of Funds 52,062.1 52,104.0 55,316.3 59,349.7
Source: Company, ICICIdirect.com Research
Key ratios
(Year-end March) FY17 FY18E FY19E FY20E
Per share data (|)
Adjusted EPS 29.0 12.2 18.6 22.4
BV per share 152.7 159.5 175.0 193.6
Dividend per share 1.2 1.4 3.2 3.8
Cash Per Share 63.1 59.1 58.9 61.4
Operating Ratios (%)
Gross Margin 74.3 70.5 70.0 71.0
EBITDA Margin 31.9 20.7 22.4 23.3
PAT Margin 22.1 11.1 15.5 16.9
Inventory days 79.0 80.0 80.0 80.0
Debtor days 83.3 79.3 79.3 79.3
Creditor days 50.8 44.6 44.6 44.6
Asset Turnover 0.7 0.6 0.6 0.6
EBITDA Conversion rate 70.2 98.0 88.6 87.3
Return Ratios (%)
RoE 19.0 7.6 10.7 11.6
RoCE 20.3 10.5 12.4 13.7
RoIC 31.2 14.5 16.7 18.7
Valuation Ratios (x)
P/E 19.6 69.0 30.5 25.3
EV / EBITDA 13.0 23.6 19.6 16.8
EV / Net Sales 4.1 4.9 4.4 3.9
Market Cap / Sales 4.3 5.2 4.7 4.3
Price to Book Value 3.7 3.6 3.2 2.9
Solvency Ratios
Debt / EBITDA 1.0 1.4 1.1 0.8
Debt / Equity 0.3 0.2 0.2 0.1
Current Ratio 1.9 1.8 1.8 1.8
Source: Company, ICICIdirect.com Research
ICICI Securities Ltd | Retail Equity Research Page 14
ICICIdirect.com coverage universe (Healthcare)
Company I-Direct CMP TP Rating M Cap
Code (|) (|) (| Cr) FY17 FY18E FY19E FY20E FY17 FY18E FY19E FY20E FY17 FY18E FY19E FY20E FY17 FY18E FY19E FY20E
Ajanta Pharma AJAPHA 1441 1,515 Hold 12680.2 57.4 57.0 63.5 75.7 25.1 25.3 22.7 19.0 42.3 34.6 31.5 30.2 33.7 26.8 24.4 23.9
Alembic Pharma ALEMPHA 555 570 Hold 10459.8 21.2 23.7 23.0 28.6 26.2 23.5 24.1 19.4 25.3 19.6 17.6 19.7 21.0 19.9 16.8 18.0
Apollo Hospitals APOHOS 1136 1,060 Hold 15810.9 15.9 13.4 24.2 34.4 71.6 84.5 46.9 33.1 6.1 7.5 9.9 12.1 6.0 4.9 8.2 10.7
Aurobindo Pharma AURPHA 609 665 Hold 35683.2 38.8 42.6 38.0 41.5 15.7 14.3 16.0 14.7 24.4 23.5 18.4 17.9 24.2 21.3 16.1 15.2
Biocon BIOCON 615 680 Buy 36870.0 8.5 8.4 11.9 16.9 72.5 73.5 51.8 36.3 9.6 10.2 13.9 17.1 10.5 9.6 12.3 15.4
Cadila Healthcare CADHEA 426 405 Hold 43637.0 14.5 16.6 18.1 20.3 29.3 25.6 23.6 21.0 13.1 17.6 16.7 17.3 21.4 20.7 19.2 18.6
Cipla CIPLA 629 640 Hold 50638.2 12.5 19.6 26.8 32.1 50.2 32.2 23.5 19.6 7.7 9.7 14.5 16.0 8.0 11.4 13.9 14.7
Divi's Lab DIVLAB 1027 1,070 Hold 27257.0 39.9 32.7 40.7 48.7 25.7 31.4 25.2 21.1 25.3 19.3 21.2 22.2 19.8 14.7 16.2 16.9
Dr Reddy's Labs DRREDD 2224 2,520 Hold 36887.7 78.0 59.4 93.4 140.2 28.5 37.4 23.8 15.9 7.3 6.8 9.5 12.1 10.5 7.5 10.8 14.2
Glenmark Pharma GLEPHA 539 535 Hold 15217.3 42.2 33.4 31.5 38.2 12.8 16.1 17.1 14.1 19.5 16.2 14.3 15.5 26.5 17.5 14.3 14.9
Indoco Remedies INDREM 277 280 Hold 2553.5 8.4 4.8 12.2 15.4 33.1 57.4 22.7 18.0 8.7 5.4 11.2 13.8 11.8 6.5 14.5 16.0
Ipca Laboratories IPCLAB 626 715 Buy 8116.0 15.4 21.4 37.6 44.7 40.6 29.2 16.7 14.0 8.7 9.6 15.5 16.7 7.9 10.1 15.4 15.9
Jubilant Life JUBLIF 940 1,090 Buy 14966.1 36.1 46.9 68.0 85.3 26.0 20.0 13.8 11.0 13.8 14.7 18.4 20.4 16.8 18.1 21.0 21.0
Lupin LUPIN 840 850 Hold 37950.2 56.7 30.2 35.1 45.2 14.8 27.8 23.9 18.6 16.6 10.0 10.9 13.7 19.0 9.3 10.0 11.6
Narayana Hrudalaya NARHRU 314 360 Buy 6415.9 4.1 3.8 6.4 9.7 76.0 83.0 48.8 32.3 12.5 10.5 14.1 18.4 8.8 7.4 11.2 14.5
Natco Pharma NATPHA 827 910 Hold 15257.6 26.3 34.8 41.5 26.7 31.4 23.8 19.9 30.9 33.6 26.7 28.1 16.7 29.5 21.4 21.9 12.9
Sun Pharma SUNPHA 568 530 Hold 136278.0 29.0 12.2 18.6 22.4 19.6 46.6 30.5 25.3 20.3 10.5 12.4 13.7 19.0 7.6 10.7 11.6
Syngene Int. SYNINT 598 680 Buy 11960.0 14.4 13.6 19.0 22.7 41.6 41.6 31.4 26.3 16.8 16.2 20.3 21.7 20.3 16.4 18.8 18.5
Torrent Pharma TORPHA 1420 1,390 Hold 24030.2 55.2 38.8 51.1 69.6 25.7 36.6 27.8 20.4 18.9 12.6 14.2 17.4 21.5 13.6 15.7 18.5
RoE (%)EPS (|) PE(x) RoCE (%)
Source: Company, ICICIdirect.com Research
ICICI Securities Ltd | Retail Equity Research Page 15
RATING RATIONALE
ICICIdirect.com endeavours to provide objective opinions and recommendations. ICICIdirect.com assigns
ratings to its stocks according to their notional target price vs. current market price and then categorises them
as Strong Buy, Buy, Hold and Sell. The performance horizon is two years unless specified and the notional
target price is defined as the analysts' valuation for a stock.
Strong Buy: >15%/20% for large caps/midcaps, respectively, with high conviction;
Buy: >10%/15% for large caps/midcaps, respectively;
Hold: Up to +/-10%;
Sell: -10% or more;
Pankaj Pandey Head – Research [email protected]
ICICIdirect.com Research Desk,
ICICI Securities Limited,
1st Floor, Akruti Trade Centre,
Road No 7, MIDC,
Andheri (East)
Mumbai – 400 093
ICICI Securities Ltd | Retail Equity Research Page 16
ANALYST CERTIFICATION
We /I, Siddhant Khandekar CA-INTER, Mitesh Shah MS (Finance) Harshal Mehta MTech (Biotechnology) Research Analysts, authors and the names subscribed to this report, hereby certify that all of the
views expressed in this research report accurately reflect our views about the subject issuer(s) or securities. We also certify that no part of our compensation was, is, or will be directly or indirectly related
to the specific recommendation(s) or view(s) in this report.
Terms & conditions and other disclosures:
ICICI Securities Limited (ICICI Securities) is a full-service, integrated investment banking and is, inter alia, engaged in the business of stock brokering and distribution of financial products. ICICI Securities
Limited is a Sebi registered Research Analyst with Sebi Registration Number – INH000000990. ICICI Securities is a wholly-owned subsidiary of ICICI Bank which is India’s largest private sector bank and has
its various subsidiaries engaged in businesses of housing finance, asset management, life insurance, general insurance, venture capital fund management, etc. (“associates”), the details in respect of which
are available on www.icicibank.com.
ICICI Securities is one of the leading merchant bankers/ underwriters of securities and participate in virtually all securities trading markets in India. We and our associates might have investment banking
and other business relationship with a significant percentage of companies covered by our Investment Research Department. ICICI Securities generally prohibits its analysts, persons reporting to analysts
and their relatives from maintaining a financial interest in the securities or derivatives of any companies that the analysts cover.
The information and opinions in this report have been prepared by ICICI Securities and are subject to change without any notice. The report and information contained herein is strictly confidential and
meant solely for the selected recipient and may not be altered in any way, transmitted to, copied or distributed, in part or in whole, to any other person or to the media or reproduced in any form, without
prior written consent of ICICI Securities. While we would endeavour to update the information herein on a reasonable basis, ICICI Securities is under no obligation to update or keep the information current.
Also, there may be regulatory, compliance or other reasons that may prevent ICICI Securities from doing so. Non-rated securities indicate that rating on a particular security has been suspended
temporarily and such suspension is in compliance with applicable regulations and/or ICICI Securities policies, in circumstances where ICICI Securities might be acting in an advisory capacity to this
company, or in certain other circumstances.
This report is based on information obtained from public sources and sources believed to be reliable, but no independent verification has been made nor is its accuracy or completeness guaranteed. This
report and information herein is solely for informational purpose and shall not be used or considered as an offer document or solicitation of offer to buy or sell or subscribe for securities or other financial
instruments. Though disseminated to all the customers simultaneously, not all customers may receive this report at the same time. ICICI Securities will not treat recipients as customers by virtue of their
receiving this report. Nothing in this report constitutes investment, legal, accounting and tax advice or a representation that any investment or strategy is suitable or appropriate to your specific
circumstances. The securities discussed and opinions expressed in this report may not be suitable for all investors, who must make their own investment decisions, based on their own investment
objectives, financial positions and needs of specific recipient. This may not be taken in substitution for the exercise of independent judgment by any recipient. The recipient should independently evaluate
the investment risks. The value and return on investment may vary because of changes in interest rates, foreign exchange rates or any other reason. ICICI Securities accepts no liabilities whatsoever for any
loss or damage of any kind arising out of the use of this report. Past performance is not necessarily a guide to future performance. Investors are advised to see Risk Disclosure Document to understand the
risks associated before investing in the securities markets. Actual results may differ materially from those set forth in projections. Forward-looking statements are not predictions and may be subject to
change without notice.
ICICI Securities or its associates might have managed or co-managed public offering of securities for the subject company or might have been mandated by the subject company for any other assignment
in the past twelve months.
ICICI Securities or its associates might have received any compensation from the companies mentioned in the report during the period preceding twelve months from the date of this report for services in
respect of managing or co-managing public offerings, corporate finance, investment banking or merchant banking, brokerage services or other advisory service in a merger or specific transaction.
ICICI Securities or its associates might have received any compensation for products or services other than investment banking or merchant banking or brokerage services from the companies mentioned
in the report in the past twelve months.
ICICI Securities encourages independence in research report preparation and strives to minimize conflict in preparation of research report. ICICI Securities or its associates or its analysts did not receive any
compensation or other benefits from the companies mentioned in the report or third party in connection with preparation of the research report. Accordingly, neither ICICI Securities nor Research Analysts
and their relatives have any material conflict of interest at the time of publication of this report.
It is confirmed that Siddhant Khandekar CA-INTER, Mitesh Shah MS (Finance) Harshal Mehta MTech (Biotechnology) Research Analysts of this report have not received any compensation from the
companies mentioned in the report in the preceding twelve months.
Compensation of our Research Analysts is not based on any specific merchant banking, investment banking or brokerage service transactions.
ICICI Securities or its subsidiaries collectively or Research Analysts or their relatives do not own 1% or more of the equity securities of the Company mentioned in the report as of the last day of the month
preceding the publication of the research report.
Since associates of ICICI Securities are engaged in various financial service businesses, they might have financial interests or beneficial ownership in various companies including the subject
company/companies mentioned in this report.
It is confirmed that Siddhant Khandekar CA-INTER, Mitesh Shah MS (Finance) Harshal Mehta MTech (Biotechnology) Research Analysts do not serve as an officer, director or employee of the companies
mentioned in the report.
ICICI Securities may have issued other reports that are inconsistent with and reach different conclusion from the information presented in this report.
Neither the Research Analysts nor ICICI Securities have been engaged in market making activity for the companies mentioned in the report.
We submit that no material disciplinary action has been taken on ICICI Securities by any Regulatory Authority impacting Equity Research Analysis activities.
This report is not directed or intended for distribution to, or use by, any person or entity who is a citizen or resident of or located in any locality, state, country or other jurisdiction, where such distribution,
publication, availability or use would be contrary to law, regulation or which would subject ICICI Securities and affiliates to any registration or licensing requirement within such jurisdiction. The securities
described herein may or may not be eligible for sale in all jurisdictions or to certain category of investors. Persons in whose possession this document may come are required to inform themselves of and
to observe such restriction.