Sun Pharmaceutical Industries Limited Corporate Office: Acme Plaza, Andheri Kurla Road, Andheri (E),...

Sun Pharmaceutical Industries LimitedCorporate Office: Acme Plaza, Andheri Kurla Road, Andheri (E), Mumbai - 400 059.

Tel: 91-22-66969696 ▪ Fax: 91-22- 28212010 ▪ www.sunpharma.com

Creating Lasting Value

Investor Presentation – May 2010

Creating Lasting Value - Investor Presentation 2

Disclaimer

Except 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


Revenue Composition

45%

35%9%

11%

IndiaBranded Generics5 Year CAGR 25%

US Generics5 Year CAGR 47%

APIs5 Year CAGR 20%

International BrandedGenerics (ex-US)

5 Year CAGR 42%

Finished Dosage sales 89%5 year CAGR 34%

International sales 53%5 year CAGR 43%

2008-09 Annual sales : Rs 43,751 million5 Year CAGR 32%


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

The performance continues

2010

5 Key operating subsidiaries8,000+ Employees

Invested Rs. 17 billion in Research

19 Manufacturing facilities in 4 Continents

More than 50% of sales from international markets

PART OF

Sun Pharma Today

‘83 ‘10


Key Operating Subsidiaries

Caraco Pharmaceutical Laboratories

Develops, manufactures, market and distributes generic and private label pharmaceuticals and markets them throughout the United States.

Chattem Chemicals, Inc.

Narcotic raw material importer and manufacturer of controlled substances with a facility in Tennessee, US

Sun Pharmaceutical Industries Limited

Sun Pharmaceutical (Bangladesh)

Owns and operates a pharmaceutical factory and makes pharmaceutical products that are sold in the local market.

Sun Pharmaceutical Industries, Inc. (SPI)

US based wholly owned subsidiary of Sun Pharmaceutical Industries Limited, India.

Alkaloida Chemical Co. Exclusive Group Ltd

ICN Hungary acquired in 2005, now renamed; one of the few units worldwide, authorized to make controlled substances


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

1,5

00

11,853

3,962

15

,00

0

00-01 01-02 02-03 03-04 04-050

4,5

00

42,723

18,177

004-05 05-06 06-07 07-08 08-09

0

20

,00

0

55

,00

0

0

5,435

1,352

0

6,0

00

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

(Figures in Rs million)


Sustained ProfitabilitySuperior business modelMargins consistently higher than peers*

-20%

-10%

0%

10%

20%

30%

40%

50%

04-05 05-06 06-07 07-08 08-09

44% 43%

-20%

-10%

0%

10%

20%

30%

40%

50%

04-05 05-06 06-07 07-08 08-09

80%

40%

50%

60%

70%

80%

04-05 05-06 06-07 07-08 08-09

85%Gross Margin EBITDA

MarginNet Margin

Sun PharmaRange of other Top 10 Pharma Cos. AverageGross margin= (Net Sales – Material Cost) / Net Sales * 100

* Other top 10 Indian Pharma companies include Ranbaxy, DRL, Cipla, Piramal Healthcare, Lupin, Wockhardt, Cadila, Aurobindo, Glenmark and Torrent


Successful At AcquisitionsAcquired 14 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 Acquisitions & RationaleYear Acquisition Country Rationale

2008Caraco 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)

2004 Womens Health Brands US Brands in womens health (US)

2004 Merged Phlox Pharma Baroda, India API Plant

2000Merged Pradeep Drug Company Ltd (PDCL)

Chennai, India API Plant

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)

1996 Acquired Gujarat LykaAnkleshwar, India

API plant

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 – 3.7%

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

Neuro-Psychiatry29%

Cardiology20%

Diabetology11%

Gastroenterology11%

Gynaecology &Urology - 7%

Musculo-Skeletal& Pain - 4%

Antiasthamatic &Antiallergic – 4%

Ophthalmology - 4%Others10%

Therapywise Break-up


Relentless Customer Focus

1998 Market Share indexed to 100 for all companies

Therapy focused marketing

• 2,500+ sales representatives covering 130,000 specialist doctors

Strong increase in prescription and sales market share

50

100

150

200

1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

Sun Cipla Ranbaxy Nicholas Cadila DRL


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 Doctors

Our Top 10 BrandsLeadership in key therapeutic areas*Specialist Oct '04 Oct '09

Psychiatrists 1 1

Neurologists 1 1

Cardiologists 3 1

Orthopaedic 3 1

Ophthalmologists 2 1

Gastroenterologists 1 2

Diabetologists 3 2

Chest Physicians 6 4

Nephrologists 5 4

Consulting Physicians 6 4

Gynaecologists 10 4

Oncologists 9 6

Urologists 8 8

ENT Specialists 7 16

Brand Name Therapy area

Glucored Oral antidiabetic

Pantocid Proton pump inhibitor/ antiulcerant

Susten Women's healthcare

Aztor CVS, cholesterol reducing agent

Pantocid-D Proton pump imhibitor/ antiulcerant

Strocit CNS, stroke

Repace CVS, Hypertension

Gemer Oral antidiabetic

Encorate chrono CNS, epilepsy

Repace H CVS, Hypertension

*Ranks based on prescription share


US GenericsIntegrated generic manufacturer with flexibility for manufacture onshore / offshore

The 76% 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 Dec-09

Endocine, 1

Gastro, 2

Urology, 1

Allergy, 2

Antibiotic, 2

Cough / Cold, 3

Metabolism, 6

Oncology, 10

CVS, 13

Pain, 14

CNS, 29


ANDA Pipeline : Significant ramp upProducts Filed and Approved Status

As of Dec 09, ANDAs for 108

products await approval

(including 12 tentative

approvals)

81 Products pending(with 8 tentative approval)

Sun Pharma

27 Products pending (with 4 tentative approval)

Caraco

40

59

95

142

176

191

1520

29

53

69

83

0

50

100

150

200

Mar-05 Mar-06 Mar-07 Mar-08 Mar-09 Dec-09

Cumulative Products Filed Cumulative Products Approved


US Generics

• Bicalutamide Tablets • Caffeine Citrate Injection • Caffeine Citrate Oral Solution• Carbidopa Levodopa OD Tablets

• Cetrizine HCl Syrup (RX)

• Ergocalciferol Capsule• Ketorolac Tromethamine Opthalmic• Prometh Syrup

16 ANDA Approvals in last 1 year

• Nicardipine HCl Injection• Oxaliplatin for Injection • Oxycodone HCl Tabs • Promethazine HCl Oral Solution • Quinapril Tablets USP • Sumatriptan Succinate Tablets • Vecuronium Bromide for Injection• Wellbutrin SR Tablets


Caraco Update• In Oct 2009, Caraco submitted a work plan to FDA for

remedial actions• Additional details and clarifications submitted on January 14,

2010• In 2QFY10, Caraco reduced its workforce by 430 employees

for an indefinite period to align its expenses with the cessation of its manufacturing operations• Has recalled some of these employees in its efforts to restart

manufacturing activities• Caraco has transferred certain of its owned products to

additional alternate manufacturing sites; would allow it regain revenues from those products


Europe Generic Markets

Plan to enter key markets

• Working on complex generic products, including injectables

• Filings from Indian site

Acquired an API and Finished

Dosage manufacturing company

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

• 450 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


Speciality API

High Margin Regulated Markets

• Business largely with end users in regulated markets

• Over 160 speciality APIs across 8 plants

Strong regulatory capability

• 148 DMF / CEP filed

• 84 approved


Strong Regulatory CapabilityInternational level quality processes and documentation

75

90

133

148

3340

81 84

0

50

100

150

Mar-07 Jun-07 Sep-07 Dec-07 Mar-08 Jun-08 Sep-08 Dec-08 Mar-09 Jun-09 Sep-09 Dec-09

DMF/CEP Filed DMF/CEP Approved


Manufacturing LocationsPlants across four continents enables us to compete with a tight handle on cost and time to market across the geographies

Jammu

Ahmednagar

Maduranthakam

BangladeshPlant

Sikkim Plant

Americas

Cranbury

DetroitBryan

Tennessee

Goiânia (Brazil)

Iztapalapa(Mexico)

Tiszavasvari(Hungary)

Europe

API and Formulations API Formulations

Halol

Ankleshwar

Panoli

DadraSilvassa

Karkhadi

India


Finished Dosage Manufacturing

13 Manufacturing sites worldwide

• India : 6, US : 3

• Over 750,000 sq. ft. area

• 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 : 6, US : 1, Hungary : 1

• Reactor capacity 1200 KL with over 650,000 sq ft area

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 8% of net

sales

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

• 2 R&D centers with about 600 scientists

Mumbai

Balancing the risk

Medium term Drug delivery systems

Immediate termANDA, DMF, Products for India

Baroda


Pharmacokinetics

Clinical Research

Analytical Method Development

Formulation Development

Organic Synthesis

State of the artresearch Labs

R&D Infrastructure

Baroda • 16 acre campus with nearly

330,000 sq. ft research area

Mumbai• 50,000 Sq. ft research campus• Develops Dosage forms and

generics for US, Europe

World-class equipment for instrumental, chemical and

microbiological analysis; Equipment include: NMR,

XRD,

LC-MS/MS, HPLCs etc.


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 Dec 31, 2009

• Rs 1,000 Invested in the 1994 IPO is currently worth more than Rs. 125,696

• Earned dividend of Rs. 4,000

Mutual Funds3%

Promoter and promoter group64%

Bodies Corporate5%

Individuals and Others6%

Financial Inst / Banks3%

FIIs / Foreign Banks19%


FinancialsMarket capitalisation Rs. 325 billion / USD 7.3 billion*

2004-05 2005-06 2006-07 2007-08 2008-09

P&L Summary

Net Sales 11,853 16,368 21,359 33,565 42,723

Gross Profit 8,619 11,492 15,592 26,344 34,154

EBITDA 4,167 4,914 6,724 15,511 18,639

Net Profit 3,962 5,733 7,843 14,869 18,177

R&D Spend 1,428 2,014 2,787 2,990 3,320

Fully Diluted EPS (Rs.) 20.7 27.7 38.9 71.8 87.8

BS Summary

Shareholders Funds 11,307 15,902 27,728 49,915 70,449

Loan Funds 18,230 18,745 11,144 1,436 1,789

Net Fixed Assets 6,213 8,977 10,122 11,040 16,196

Investments 6,485 3,541 2,543 7,560 18,595

Cash and Bank Balances 11,809 15,324 13,802 12,389 16,690

Inventories 3,173 5,117 6,645 7,723 9,757

Sundry Debtors 2,511 3,609 6,789 14,177 8,811

Sundry Creditors 1,063 1,110 968 2,393 2,543

Cash Flow Summary

Net Cash from Operating Activities 3,754 1,852 2,395 5,048 21,651

Net Cash used in Asset Creation Activities

1,666 3,387 2,000 1,995 5,900

Figures in Rs million

*Exchange Rate : 1 USD = Rs 44.44


Financial Ratios

2004-05 2005-06 2006-07 2007-08 2008-09

Growth (%)

Net Sales 25.5 38.1 30.5 57.1 27.3

Gross Profit 22.2 33.3 35.7 69.0 29.6

EBITDA 5.9 17.9 36.8 130.7 20.2

Net Profit 25.5 44.7 36.8 89.6 22.2

Margins (%)

Gross Margin 72.7 70.2 73.0 78.5 79.9

EBITDA Margin (%) 35.2 30.0 31.5 46.2 43.6

Net Margin 33.4 35.0 36.7 44.3 42.5

Return (%)

Return on Average Capital Employed 20.1 18.7 22.7 35.5 31.5

Return on Average Net Worth 48.6 45.6 37.0 38.3 30.2

Others

Debt / Equity 1.61 1.18 0.40 0.03 0.03

R&D Spend % of Net Sales 12.0 12.3 13.0 8.9 7.8

Revenue 8.5 9.4 11.4 8.5 7.3

Capital 3.5 2.9 1.6 0.4 0.5


Q3 and 9m FY10 UpdateFigures in Rs million

68.7

8.2%

2,572.0

45.3%

14,228.5

47.5%

14,893.3

79.6%

24,975.8

22,196.1

9m FY09

46.2

6.4%

1,906

32.0%

9,566.0

31.5%

9,443.0

72.2%

21,619.5

29,936.2

9m FY10

(32.8%)

(25.9%)

(32.8%)

(36.6%)

(13.4%)

(4.6%)

ChangeQ3 FY10 Q3 FY09 Change FY 0809

Net Sales 10,208.6 9,182.8 11.2% 42,723.0

Gross Profit 7,351.3 7,410.2 (0.8%) 34,154.2

Gross Margin 72.0% 80.7% 79.9%

EBITDA 3,684.1 4,134.3 (10.9%) 18,638.8

EBITDA Margin 36.1% 45.0% 43.6%

Net Profit 3,389.5 4,086.4 (17.1%) 18,177.3

Net margin 33.2% 44.5% 42.5%

R&D 514.6 945.7 (45.6%) 3,320.4

R&D as % of Net Sales 5.0% 10.3% 7.8%

EPS (Diluted) INR 16.4 19.7 (17.1%) 87.8 68.7

8.2%

2,572.0

45.3%

14,228.5

47.5%

14,893.3

79.6%

24,975.8

31,378.9

9m FY09

46.2

6.4%

1,906

32.0%

9,566.0

31.5%

9,443.0

72.2%

21,619.5

29,936.2

9m FY10

(32.8%)

(25.9%)

(32.8%)

(36.6%)

(13.4%)

(4.6%)

ChangeQ3 FY10 Q3 FY09 Change FY 0809

Net Sales 10,208.6 9,182.8 11.2% 42,723.0

Gross Profit 7,351.3 7,410.2 (0.8%) 34,154.2

Gross Margin 72.0% 80.7% 79.9%

EBITDA 3,684.1 4,134.3 (10.9%) 18,638.8

EBITDA Margin 36.1% 45.0% 43.6%

Net Profit 3,389.5 4,086.4 (17.1%) 18,177.3

Net margin 33.2% 44.5% 42.5%

R&D 514.6 945.7 (45.6%) 3,320.4

R&D as % of Net Sales 5.0% 10.3% 7.8%

EPS (Diluted) INR 16.4 19.7 (17.1%) 87.8


Taro Update

Latest

Background• Taro sent Sun Pharma a notice for purported termination of the merger

agreement claiming a dramatic turnaround

• Sun Pharma’s cash injections of approx. $60 million last year was a major factor, otherwise Taro would have virtually negative cash

• 75% of Taro shareholders who are not identified with either Levitt family or Sun objected to the continued control of the Company by the Levitt family and its representatives on the Board in the 31 Dec 2009 AGM• Despite this, the entire Board was re-elected on account of the voting majority of

the Levitts

• Shareholders voted decisively against the election of Taro’s external director


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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