)
The Sun Pharmaceuticals scrip today rallied on the Bombay Stock Exchange to hit a 52-week high of Rs 1,024.75 before closing at Rs 1,014.85, up 4.66 per cent from its previous close, on the buzz that the company might be readying to announce a big-ticket deal.
If market sources are to be believed, Sun Pharma, which has been looking for a buyout opportunity for some time, could be eyeing Germany-based Stada for an acquisition. The company could announce the deal along with its January-March earnings tomorrow.
Both Sun Pharma and Stada refused to comment on the likely deal, calling it market speculation. "We have absolutely no comment on market conjecture," Sun Pharma said in response to a Business Standard query.
Stada said: "Our multi-pillar strategy, focusing on a well-balanced product portfolio, with high-volume generics and high-margin branded products on the one hand; and our increasing internationalisation, with a very reasonable country mix and huge growth rates, in Eastern Europe for example, on the other, is key for our success. This success makes Stada quite attractive. So, we are constantly confronted with market rumours concerning potential M&A stories. Stada doesn't comment on such market rumours in general."
Sun Pharma is known to be looking for big acquisition opportunities, mainly in the US and emerging markets. The company had also earmarked some funds for this purpose. The objective is mainly to expand capacity to sell generic medicines and gain control of manufacturing sites and sales networks through buyouts. However, there have been similar speculations in the past, with names of various major global generic drug makers emerging as targets.
According to Stada's website, generics account for 66 per cent of the group's current total annual sales. Its consolidated sales for 2012 stood at ^1,837.5 million, up seven per cent from the previous year. Apart from generics, its portfolio also consists of branded products, which recorded sales growth of 26 per cent to ^596.2 million in 2012.
On Friday, Sun Pharma's stock had declined 3.7 per cent after its Israeli unit, Taro Pharmaceuticals, posted a lower-than-expected net profit in the January-March quarter. Taro contributes nearly 28 per cent to Sun's revenues and 38 per cent to its profit before tax.
The Street expects Sun to report a growth in revenue and profit for the quarter ended March. Estimates for sales range from Rs 2,709 crore to Rs 3,035 crore. According to Angel Broking, the company's profit in the quarter could rise 21.5 per cent year-on-year to Rs 997 crore. Edelweiss Securities expects the company's net profit to grow 15.7 per cent to Rs 949 crore.
