Sun Pharma drops on profit booking

Sun Pharmaceutical Industries lost 2.17% to Rs 614.15 at 14:42 IST on BSE, with the stock sliding on profit taking after recent rally triggered by the announcement that the company will acquire 100% of Ranbaxy Laboratories in an all-stock transaction

Meanwhile, the S&P BSE Sensex was up 55.66 points or 0.25% at 22,758.

On BSE, so far 6.32 lakh shares were traded in the counter as against average daily volume of 1.81 lakh shares in the past one quarter.

The stock was volatile. The stock lost as much as 2.58% at the day's low of Rs 611.60 so far during the day. The stock rose as much as 2.45% at the day's high of Rs 643.20 so far during the day. The stock had hit a record high of Rs 653.10 on 3 March 2014. The stock had hit a 52-week low of Rs 423.18 on 10 April 2013.

The stock had underperformed the market over the past one month till 9 April 2014, advancing 2.56% compared with the Sensex's 3.57% rise. The scrip had also underperformed the market in past one quarter, gaining 3.51% as against Sensex's 9.6% rise.

The large-cap company has equity capital of Rs 207.12 crore. Face value per share is Re 1.

Shares of Sun Pharmaceutical Industries (Sun Pharma) had rallied 9.77% in two trading sessions to settle at Rs 627.80 on Wednesday, 9 April 2014, from a recent low of Rs 571.90 on 4 April 2014 after Sun Pharma and Ranbaxy Laboratories (Ranbaxy) in a joint statement issued on Sunday, 6 April 2014, announced that they have entered into definitive agreements pursuant to which Sun Pharma will acquire 100% of Ranbaxy in an all-stock transaction. As per the share swap ratio, Ranbaxy shareholders will receive 8 shares of Sun Pharma for every 10 equity shares of Ranbaxy. This exchange ratio represents an implied value of Rs 457 for each Ranbaxy share, a premium of 18% to Ranbaxy's 30-day volume-weighted average share price and a premium of 24.3% to Ranbaxy's 60-day volume-weighted average share price, in each case, as of the close of business on 4 April 2014.

The combination of Sun Pharma and Ranbaxy creates the fifth-largest specialty generics company in the world and the largest pharmaceutical company in India. The combined entity will have operations in 65 countries, 47 manufacturing facilities across 5 continents, and a significant platform of specialty and generic products marketed globally, including 629 ANDAs. On a pro forma basis, the combined entity's revenues are estimated at $4.2 billion with EBITDA of $1.2 billion for the twelve month period ended December 31, 2013. The transaction value implies a revenue multiple of 2.2 based on 12 months ended 31 December 2013.

Sun Pharma at the fag end of the trading session on Wednesday, 9 April 2014, issued clarification in response to various reports on Silverstreet's investment in Ranbaxy. This pertains to purchase of shares of Ranbaxy Laboratories by Silverstreet Developers LLP and it does not violate insider trading rules, Sun Pharma said. Mr. Sudhir Valia is not and was not a partner of Silverstreet Developers LLP when purchase of shares of Ranbaxy Laboratories was affected by LLP. Silverstreet Developers LLP has two partners. Both are 100% subsidiaries of Sun Pharma. Hence, all the benefits flowing from the investment in Ranbaxy shall accrue to Sun Pharma, Sun Pharma said in a statement.

Sun Pharmaceutical Industries' consolidated net profit surged 73.7% to Rs 1531.09 crore on 50.3% growth in net sales to Rs 4286.59 crore in Q3 December 2013 over Q3 December 2012.

Sun Pharmaceutical Industries is an international specialty pharmaceutical company with over 72% sales from global markets. It manufactures and markets a large basket of pharmaceutical formulations as branded generics as well as generics in US, India and several other markets across the world.

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