LIC sells a stake worth Rs 3882 crore in Sun Pharmaceutical

Sun pharma has showcased poor 5-year growth numbers

Indian state-owned insurance group and investment company, Life Insurance Corporation of India (LIC) has sold around 2 per cent stake in India’s largest pharmaceutical company, Sun Pharmaceuticals Industries Ltd. 

LIC sold its 2 per cent stake between the period of May 17, 2021, and July 22 2022. The average selling price for LIC stood at Rs 808.02 a share. LIC previously held 16,85,66,486 quantity of shares and now it holds 12,05,24,944 equity shares of Sun Pharmaceuticals, selling Rs 3,881.85 crore worth of stake in the company. 

Sun Pharmaceutical Industries Ltd produces, develops, and sells a wide range of branded and generic formulations, as well as Active Pharmaceutical Ingredients (APIs). The company and its subsidiaries have about 43 manufacturing facilities worldwide. The company’s revenue can be categorized into 5 segments- India branded formulations (which contribute 31 per cent to the total revenue), US formulations (30 per cent), emerging markets (18 per cent), rest of the world (ROW) (15 per cent), and API & others (6 per cent). 

Talking about company financials, the 10-year sales and net profit growth look decent at 17 per cent and 10 per cent, respectively. However, the 5-year growth numbers remain poor at 4 per cent, and -1 per cent, respectively. 

The company has an ROE, ROCE, and dividend yield of 14 per cent, 18.4 per cent, and 0.81 per cent, respectively, as per the March period ending. With a market value of Rs 207,566 crore, the company's shares are currently trading at a PE multiple of 31.4x. 

Regarding the shareholding structure, the promoters own about 54.48 per cent of the company, FIIs and DIIs together own 34.61 per cent, and non-institutional investors own the remaining 10.91 per cent. 

The shares of Sun Pharma as of July 26 at 2:11 pm are trading at Rs 866.6.