Friday, 25 November 2016

Near term growth concerns to weigh on Sun Pharma

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Sun Pharma has acquired 85% stake in OJSC Biosintez, a Russian company. With that, it gets a facility in Russia, which saw total pharma distributor-to-retailer sales of $10 billion in 12 months to September 2016. Russia and Commonwealth of Independent States (countries part of the Soviet Union) saw $200 million in sales in FY16. 

 

The facility in Russia can drive growth as local units there are needed to bid for government projects. The government accounts for about 30% of total market. Thus, acquisition at enterprise value to sales ratio of 1.15 is attractive.

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