Creating Lasting Value Investor Presentation- July 2011

Creating Lasting ValueInvestor Presentation- July 2011

Creating Lasting Value - Investor Presentation 2

DisclaimerExcept for the historical information contained herein, statements in this

presentation and the subsequent discussions, which include words or phrases

such as “will”, “aim”, “will likely result”, “would”, “believe”, “may”, “expect”,

“will continue”, “anticipate”, “estimate”, “intend”, “plan”, “contemplate”, “seek

to”, “future”, “objective”, “goal”, “likely”, “project”, “should”, “potential”, “will

pursue” and similar expressions or variations of such expressions may

constitute "forward-looking statements". These forward-looking statements

involve a number of risks, uncertainties and other factors that could cause

actual results to differ materially from those suggested by the forward-looking

statements. These risks and uncertainties include, but are not limited to our

ability to successfully implement our strategy, our growth and expansion plans,

obtain regulatory approvals, our provisioning policies, technological changes,

investment and business income, cash flow projections, our exposure to market

risks as well as other risks. Sun Pharmaceutical Industries Limited does not

undertake any obligation to update forward-looking statements to reflect

events or circumstances after the date thereof.


Agenda

RevenueComposition

1

Strategy &Approach

History &Profile

Growth

Key Acquisitions

BusinessOperations

GeographiesAPI, FinishedDosage &Manufacturing

Research &Development

Management & Governance

Financials

23

45


Agenda

RevenueComposition

1

Strategy &Approach

History &Profile

Growth

Key Acquisitions

BusinessOperations




Financials

23

45

41%

39%

11%

9%

Revenue Composition2010-11 Annual sales : Rs 58,065 million5 Year CAGR 27%

IndiaBranded Generics5 Year CAGR 20%

US Generics5 Year CAGR 44%

International Generics 5 Year CAGR 37%

APIs5 Year CAGR 14%

Finished Dosage sales 91%5 year CAGR 30%

International sales 57%5 year CAGR 37%

5


Creating Value, Continuously…

1983

Began with 5 products

1993

First Research CentreSPARC, Baroda

1994

IPO - Rs. 550 Mn raised

1995

First API Plant Panoli

1997

$7.5Mn invested in Caraco

2004

USD 350mnFCCB raised

2007

Demergerof innovative R&D to SPARC

10,000+ EmployeesInvested Rs. 21 billion in Research

More than 60% of sales from international markets

Sun Pharma Today

‘83 ‘11

23 Manufacturing facilities in 4 Continents

PART OF

2010

Acquired Taro

2011

JV for Emerging Markets


Agenda

RevenueComposition

1

Strategy &Approach

History &Profile

Growth

Key Acquisitions

BusinessOperations




Financials

23

45


Strategy and Approach

Create sustainable revenue streams

• Focus: Chronic therapies

• Differentiation: Technically complex products

• Speed to market

Seek cost leadership

• Vertical integration : Development through Manufacturing (API and Finished Dosage) to Marketing

• Optimize operational costs

Balance profitability and investments for future• Acquisitions yielding high ROI

• Development of complex generics


Growing SteadilyConsistent top-line and bottom-line growth; continuing the trend despite increasing size

Net Sales Net Profit(Figures in Rs million)

5733

16368

01

8,0

00

01-02 02-03 03-04 04-05 05-06

06

,00

0 18160

57214

06

0,0

00

06-07 07-08 08-09 09-10 10-11

02

0,0

00

5,435

1,352

06

00

0

96-97 97-98 98-99 99-00 00-01

01

,50

0

Sustained ProfitabilitySuperior business model Margins consistently higher than peers*

74%

40%

50%

60%

70%

80%

90%

06-07 07-08 08-09 09-10 10-11

34%

0%

10%

20%

30%

40%

50%

06-07 07-08 08-09 09-10 10-11

32%

-20%

-10%

0%

10%

20%

30%

40%

50%

06-07 07-08 08-09 09-10 10-11

Sun Pharma Range of other Top 10 Pharma Cos. Average

Gross margin= (Net Sales – Material Cost) / Net Sales * 100* Other top 10 Indian Pharma company include Biocon, DRL, Cipla, Ipca, Lupin, Wockhardt, Zydus Cadila, Aurobindo, Glenmark and Torrent

Gross Margin EBITDA Margin Net Margin


Successful At AcquisitionsAcquired 16 high potential yet under-performing businesses*; successful turnarounds

Net Sales (MINR) Operating Margin(%) Operating Profit (MINR)

0

2,000

4,000

6,000

8,000

10,000

95-96 96-97 97-98 98-99 99-00 00-01 01-02 02-03 03-040

9

18

27

36

45

8 Early Acquisitions


Key Deals & RationaleYear Deals Country Rationale

2011 Privatization of Caraco US

2011Formation of Sun-MSD JV

Emerging Markets

Develop and commercialize technology based combinations products

2010Acquired Taro Pharmaceutical Industries Ltd.

IsraelDermatology & Topical ProductManufacturing Plant at Israel & Canada

2009Caraco acquired some products of Forest’s Inwood business

US Increased generic product offerings

2008Acquired Chattem Chemicals,

Inc.Tennessee, US

Import registration with DEA, API Plant approved by DEA in Tennessee, US

2005 Assets of Able labs New Jersey, US Dosage form plant (NJ, US) and IP

2005 Formulation plant in Bryan Ohio, US Dosage form plant (Ohio, US)

2005 Acquired ICN Hungary Hungary API and dosage form plant (Hungary)

1999 Merged Milmet Labs India Ophthalmology brands

1998 Brands from Natco India Respiratory brands

1997 Acquired Caraco Detroit, US Dosage form Plant

1997Merged Tamilnadu Dadha Pharmaceuticals Ltd (TDPL)

Chennai, IndiaGynecology and oncology brands; API and dosage form plant

1996 Acquired MJ Pharma Halol, IndiaDosage form plant (now USFDA approved)

1996Bulk Drug plant from Knoll Pharma

Ahmednagar, India

API plant (now USFDA approved)


Agenda

RevenueComposition

1

Strategy &Approach

History &Profile

Growth

Key Acquisitions

BusinessOperations




Financials

23

45


India Branded Generics : Strong Base

• Market Share : 4.3%*

• Leadership in chronic segment; Top 3 in over 50% of more than 500 brands

Neuro-Psychiatry28%

Cardiology19%

Gastroenterology11%

Diabetology 14%

Gynecology & Urology- 7%

Musculo-Skeletal & Pain- 5%

Antiasthamatic & Antiallergic- 4%

Opthalmology- 5%Others8%

Therapywise Break-up

* As per AWACS

Gastroenterology11%

Opthalmology5%

Others8%

Cardiology19%

Neuro-Psychiatry27%

Antiasthamatic & Antiallergic 4%

Musculo-Skeletal & Pain 5%

Gynecology & Urology 7%

Diabetology14%


Relentless Customer Focus

1999 Market Share indexed to 100 for all companies

Therapy focused marketing

• 2,700+ sales representatives covering 140,000 specialist doctors

Strong increase in prescription and sales market share

50

100

150

200

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

Sun Lupin Cipla Ranbaxy Piramal Cadila Dr. Reddy


Therapy Focused Marketing Delivering promotional message to specialty customers.

Cardiology, DiabetologyGastroenterology, Orthopedics

Oncology

Rheumatology, Dermatology

Asthma, COPD

Interventional Cardiology

Fertility, Gynecology,Urology

Psychiatry, Neurology GynecologyOphthalmology


Preferred Choice of DoctorsTop 10 Brands contribute 15%Of India Sale

Leadership in key therapeutic areas*Specialist Feb '06 Feb ‘11

Psychiatrists 1 1

Neurologists 1 1

Cardiologists 1 1

Orthopaedic 2 1

Ophthalmologists 1 1

Gastroenterologists 2 1

Diabetologists 1 2

Nephrologists 4 2

Consulting Physicians

5 2

Chest Physicians 5 4

Gynaecologists 10 6

Urologists 8 8

Oncologists 4 8

ENT Specialists 10 18

Brand Name

Therapy area

PantocidProton pump inhibitor/ antiulcerant

Glucored Group

Oral antidiabetic

Susten Women's healthcare

AztorCVS, cholesterol reducing agent

Pantocid-DProton pump inhibitor/ antiulcerant

Gemer Oral antidiabetic

Repace Group

CVS, Hypertension

Strocit CNS, stroke

Clopilet CVS, anticlotting agent

Encorate chrono

CNS, epilepsy*Ranks based on prescription share

Sitagliptin partnership for India• Sun Pharma and MSD (India) entered a Strategic Partnership

to co-market MSD's diabetes drugs, sitagliptin and sitagliptin plus metformin

• Sun Pharma has rights to market, promote and distribute in India under different brand names

• Partnership to deliver treatment benefits of DPP4 inhibitors to expanded base of diabetic patients by expanding market reach to a wider pool of doctors & patients

• Will extend the benefits of a new class of drugs like DPP4 inhibitors much earlier in patients disease cycle



US GenericsIntegrated generic manufacturer with flexibility for manufacture onshore / offshore

The 100% owned US generics subsidiary, markets own and Sun Pharma ANDAs

Sun Pharmaceutical

Industries, Inc. (SPI)

Caraco Pharmaceutical Laboratories Ltd.

A wholly owned subsidiary of Sun Pharma in US

ApprovalsTherapy wise summary

As on Mar-11

Taro Pharmaceutical Industries Ltd.

The 66% owned subsidiary of Sun Pharma

Other, 10

Cough / Cold, 6

Metabolism, 7

Oncology, 12

Allergy, 13

Pain, 15

CVS, 20

CNS, 53

Skin, 89


ANDA Pipeline : Significant ramp upProducts Filed and Approved Status

As of Mar 11, ANDAs for 152

products await approval

(including 20 tentative

approvals)

100 Products pending(with 12 tentative approval)

Sun Pharma

29 Products pending (with 4 tentative approval)

Caraco

Taro23 Products pending (with 4 tentative approval)

(Taro numbers added for Mar 2011)

4059

95

142

177

207

377

15 2029

5369

84

225

0

50

100

150

200

250

300

350

400

Mar-05 Mar-06 Mar-07 Mar-08 Mar-09 Mar-10 Mar-11

Cumulative Products Filed Cumulative Products Approved


US Generics

• Letrozole Tablets

• Meprobamate Tablets USP

• Tamsulosin HCL Capsules

• Venlafaxine HCL Tablets

• Diltiazem HCL ER Capsules

• Galantamine HCL ER Capsules

• Risperidone Oral Solution

• Ondansetron HCL Tablets

16 ANDA Approvals in last 1 year

• Sumatriptan Succinate Injection

• Cetirizine HCl Oral Solution

• Imiquimod Cream 5%

• Atomoxetine HCL Capsules

• Desloratidine Tablets

• Mupirocin Ointment

• Naratriptan Tablets

• Ciclopirox Shampoo


Caraco Update• On June 14, 2011, Caraco shareholder approved Merger Agreement

with Sun Pharma and Consummation of the Merger • Public shareholders to receive $5.25 cash per share

• Caraco's common stock will be delisted from the NYSE Amex

Taro Update• Taro performance

• For Jan-Mar CY11, Taro net sales grew by 21% to $ 107.7 million when compared to same period last year

• Operating margin at 31% for the quarter

• Net income at $ 25.7 million for the quarter compared to $ 8.6 million in first quarter of 2010

• In June 2011, Taro filed 20F for CY 2010• No reporting or audit backing.

• Taro Resolves FDA Warning Letter• On April 25, 2011, the USFDA informed Taro that its Canadian

manufacturing facility has an acceptable regulatory status and therefore the issues mentioned in its warning letter of Feb 2009 are considered to be resolved



Europe Generic Markets

Focused key markets

• Working on complex generic products, including injectables

• Filings from Indian site

An API and Finished Dosage

manufacturing site in Hungary

with controlled substance

capacity

Focus Countries


International Branded Generic Markets

Less Regulated Markets

• Product basket width and technology based products as growth drivers

Replicating the speciality template• 40 countries

• 600 strong local sales force promotes brands to doctors

CIS Countries

China

Sri Lanka

Map Not to Scale

Mexico

South AfricaOther Markets

Focus Markets

Brazil

Myanmar


Leveraging through Partnership• Sun Pharma and Merck establish a Joint Venture for Emerging

Markets excluding India• JV to bring new combinations and formulations of incrementally

innovative, branded generics to market

• Opportunity to use SPARC Proprietary Delivery Technologies

• Equally representation in JV for Sun Pharma & Merck

• JV to use partners infrastructure for development, manufacturing,

regulatory and commercialization.


Speciality API

High Margin Regulated Markets

•Business largely with end users in regulated markets

•Over 160 speciality APIs across 8 plants

Strong regulatory capability

• 207 DMF / CEP filed

• 127 approved

(Including Taro)

Strong Regulatory Capability

75

90

133

155

207

3340

8189

127

0

50

100

150

200

250

Mar-07 Mar-08 Mar-09 Mar-10 Mar-11

DMF/CEP Filed DMF/CEP Approved

International level quality processes and documentation


Integrated product dev and manufacturing network

29

Vertically integrated network across four continents enabling high quality, low cost and a quick market entry across the geographies

Halol

AnkleshwarPanoli

DadraSilvassa

Karkhadi

Bangladesh PlantAhmednagar

Maduranthakam

Sikkim PlantJammu

Tiszavasvari(Hungary)

Goiânia (Brazil)

Iztapalapa(Mexico)

Israel

API and Formulations API Formulations

Global networked facilities are FDA, EMEA, TGA approved

Ontario (Canada)

CranburyBryan

Tennessee

Detroit

Taro PharmaceuticalsSun Pharma


Finished Dosage Manufacturing

15 Manufacturing sites worldwide

• India : 6, US : 3, Canada : 1

• Capacities available for a variety of finished dosage

Tablets / Capsules

Semisolids

Liquids

Suppository

Injectables / Sterile

Vials Dry powder

Ampoules Eye drops

Pre-filled Syringes MDI

Gels Aerosols

Lyophilized Units


API Manufacturing

8 World class locations with all sites ISO 14001, ISO 9002 approved• India : 5, Israel : 1, US : 1,

Hungary : 1 Over 25 API processes scaled up annually

APIKey Plants

Panoli & Ahmednagar (both India)

• International regulatory approvals: USFDA, European

• Stand alone units for peptides, anti-cancer, steroids, sex hormones

Hungary & Tennessee (US)

• Controlled substances manufacture


Agenda

RevenueComposition

1

Strategy &Approach

History &Profile

Growth

Key Acquisitions

BusinessOperations




Financials

23

45


Research and Development• Generic R&D spend around 6% of net

sales

• Strong research teams in generics, finished dosage development, biological support, chemistry

• 4 R&D centers with about 800 scientists

Mumbai

Balancing the risk

Medium term Drug delivery systems

Immediate termANDA, DMF, Products for India

Baroda


Agenda

RevenueComposition

1

Strategy &Approach

History &Profile

Growth

Key Acquisitions

BusinessOperations




Financials

23

45


Corporate Governance

Our philosophy on corporate governance

envisages working towards high levels of

transparency, accountability and consistent

value systems across all facets of operations

Committee chaired by Keki Mistry comprises Hasmukh Shah and S. Mohanchand Dadha

Audit CommitteeEminent Independent Directors

Hasmukh Shah Chairman Gujarat GasFormer Chairman and Managing Director, IPCL

Keki Mistry

Vice Chairman and CEO, HDFC

S. Mohanchand Dadha Former Chairman & Managing Director, TDPL

Ashwin Dani Vice Chairman and Managing Director, Asian Paints Ltd.


Agenda

RevenueComposition

1

Strategy &Approach

History &Profile

Growth

Key Acquisitions

BusinessOperations




Financials

23

45


Shareholding Patternas on Mar 31, 2011

• Rs 1,000 Invested in the 1994 IPO is currently worth more than Rs. 200,000

• Earned dividend of Rs. 5,000

Mutual Funds3%

Promoter and promoter group64%

Bodies Corporate5%

Individuals and Others6%

Financial Inst / Banks4%

FIIs / Foreign Banks18%

• Total Outstanding Share - 1035 Mn• Total Free Float Share - 375 Mn• Daily Average Trading - 1.08 Mn


FinancialsMarket Capitalisation Rs. 514 billion / USD 11.53 billion* Figures in Rs million

*Exchange Rate : 1 USD = Rs 44.72

2006-07 2007-08 2008-09 2009-10 2010-11P&L Summary

Net Sales 21,359 33,565 42,723 40,075 57,214 Gross Profit 15,592 26,344 34,154 29,096 42,607 EBITDA 6,724 15,511 18,639 13,628 19,671 Net Profit 7,843 14,869 18,177 13,511 18,160 R&D Spend 2,787 2,859 3,320 2,631 3,313

BS SummaryShareholders Funds 27,728 49,915 70,449 78,289 94,833 Loan Funds 11,144 1,436 1,789 1,712 4,256 Net Fixed Assets 10,122 11,040 16,196 16,776 27,940 Investments 2,543 7,560 18,595 31,664 22,310 Cash and Bank Balances 13,802 12,389 16,690 5,089 21,936 Inventory 6,645 7,723 9,757 10,739 14,794 Sundry Debtors 6,789 14,177 8,811 11,748 11,716 Sundry Creditors 968 2,393 2,543 3,194 4,808


Financial Ratios

* Adjusted for stock split

2006-07 2007-08 2008-09 2009-10 2010-11Growth (%)Net Sales 30.5 57.1 27.3 (6.2) 42.8 Gross Profit 35.7 69.0 29.6 (14.8) 46.4 EBITDA 36.8 130.7 20.2 (26.9) 44.3 Net Profit 36.8 89.6 22.2 (25.7) 34.4

Margins (%)Gross Margin 73.0 78.5 79.9 72.6 74.5 EBITDA Margin (%) 31.5 46.2 43.6 34.0 34.4 Net Margin 36.7 44.3 42.5 33.7 31.7

Return (%)Return on Average Capital Employed 22.7 35.5 31.5 19.5 22.0 Return on Average Net Worth 37.0 38.3 30.2 18.2 21.0 OthersDebt / Equity 0.40 0.03 0.03 0.02 0.04 Fully Diluted EPS (Rs)* 7.6 14.4 17.6 13.0 17.5

R&D Spend % of Net Sales 13.0 8.5 7.8 6.6 5.8 Revenue 11.4 8.1 7.3 6.2 5.4 Capital 1.6 0.4 0.5 0.4 0.4

Guidance for FY12

• Sales growth : 28-30% over FY11

• R&D : 6% of sales

• Capex : Rs 450 crore

• ANDAs for 25 products to be filed

40


For updates and specific queries, please visit www.sunpharma.com or feel free to contactUday BaldotaTel : +91 22 6645 5645, Ext 605Tel Direct : +91 22 66455605Mobile : +91 98670 [email protected]

Mira DesaiTel : +91 22 6645 5645, Ext 606Tel Direct : +91 22 66455606Mobile : +91 98219 [email protected]

© 2010 Sun Pharmaceutical Industries Limited., All Rights Reserved.

“SUN Pharma”, The Sun Pharmaceutical Industries Logo are trademarks of Sun Pharmaceutical Industries Limited.

In addition to Company data, data from IMS – ORG, CMARC, Stock Exchanges and industry publications has been used for this presentation.

This material was used during an oral presentation; it is not a complete record of the discussion. This work may not be used, sold, transferred, adapted,

abridged, copied or reproduced in whole on or in part in any manner or form or in any media without the prior written consent. All product names and

company names and logos mentioned herein are the trademarks or registered trademarks of their respective owners.

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Creating Lasting Value Investor Presentation- July 2011