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Creating Lasting Value

Creating Lasting Value. Investor Presentation- July 2011. Disclaimer.

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Creating Lasting Value

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  1. Creating Lasting Value Investor Presentation- July 2011

  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. Creating Lasting Value - Investor Presentation 2

  3. Agenda 5 4 3 2 Management & Governance Financials 1 Research &Development BusinessOperations Strategy &Approach RevenueComposition Growth Geographies API, FinishedDosage &Manufacturing History &Profile Key Acquisitions Creating Lasting Value - Investor Presentation 3

  4. Agenda 5 4 3 2 Management & Governance Financials 1 Research &Development BusinessOperations Strategy &Approach RevenueComposition Growth Geographies API, FinishedDosage &Manufacturing History &Profile Key Acquisitions Creating Lasting Value - Investor Presentation 4

  5. Finished Dosage sales 91% 5 year CAGR 30% International sales 57% 5 year CAGR 37% 41% 9% 11% 39% Revenue Composition 2010-11 Annual sales : Rs 58,065 million5 Year CAGR 27% IndiaBranded Generics5 Year CAGR 20% APIs5 Year CAGR 14% US Generics5 Year CAGR 44% International Generics 5 Year CAGR 37% 5

  6. Creating Value, Continuously… 1983 Began with 5 products ‘83 ‘11 1995 2004 2010 USD 350mnFCCB raised First API Plant Panoli Acquired Taro 1993 2011 2007 1997 1994 First Research CentreSPARC, Baroda $7.5Mn invested in Caraco JV for Emerging Markets Demergerof innovative R&D to SPARC IPO - Rs. 550 Mn raised Sun Pharma Today PART OF Invested Rs. 21 billion in Research 23 Manufacturing facilities in 4 Continents 10,000+ Employees More than 60% of sales from international markets Creating Lasting Value - Investor Presentation 6

  7. Agenda 5 4 3 2 Management & Governance Financials 1 Research &Development BusinessOperations Strategy &Approach RevenueComposition Growth Geographies API, FinishedDosage &Manufacturing History &Profile Key Acquisitions Creating Lasting Value - Investor Presentation 7

  8. Strategy and Approach Create sustainable revenue streams Seek cost leadership • Focus: Chronic therapies • Differentiation: Technically complex products • Speed to market • 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 Creating Lasting Value - Investor Presentation 8

  9. Growing Steadily 60,000 5733 6,000 18160 18,000 20,000 57214 16368 0 0 0 0 01-02 02-03 03-04 04-05 05-06 06-07 07-08 08-09 09-10 10-11 Net Profit Net Sales Consistent top-line and bottom-line growth; continuing the trend despite increasing size 6000 1,500 1,352 5,435 0 0 96-97 97-98 98-99 99-00 00-01 (Figures in Rs million) Creating Lasting Value - Investor Presentation 9

  10. 50% 50% 90% 40% 40% 32% 80% 34% 74% 30% 30% 70% 20% 10% 20% 60% 0% 50% 10% -10% 40% -20% 0% 06-07 07-08 08-09 09-10 10-11 06-07 07-08 08-09 09-10 10-11 Sustained Profitability Superior business model Margins consistently higher than peers* EBITDA Margin Net Margin Gross Margin 06-07 07-08 08-09 09-10 10-11 SunPharma 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

  11. Successful At Acquisitions 10,000 45 8 Early Acquisitions 8,000 36 6,000 27 4,000 18 2,000 9 0 0 95-96 96-97 97-98 98-99 99-00 00-01 01-02 02-03 03-04 Net Sales (MINR) Operating Margin(%) Operating Profit (MINR) Acquired 16 high potential yet under-performing businesses*; successful turnarounds Creating Lasting Value - Investor Presentation 11

  12. Key Deals & Rationale Creating Lasting Value - Investor Presentation 12

  13. Agenda 5 4 3 2 Management & Governance Financials 1 Research &Development BusinessOperations Strategy &Approach RevenueComposition Growth Geographies API, FinishedDosage &Manufacturing History &Profile Key Acquisitions Creating Lasting Value - Investor Presentation 13

  14. India Branded Generics : Strong Base Market Share : 4.3%* Leadership in chronic segment; Top 3 in over 50% of more than 500 brands Therapywise Break-up Others Opthalmology - 5% Neuro-Psychiatry 8% 28% Antiasthamatic & Antiallergic - 4% Musculo-Skeletal & Pain - 5% Gynecology & Urology - 7% Diabetology Cardiology 14% 19% Gastroenterology 11% * As per AWACS Creating Lasting Value - Investor Presentation 14

  15. Relentless Customer Focus 200 150 100 50 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Sun Lupin Cipla Ranbaxy Piramal Cadila Dr. Reddy Strong increase in prescription and sales market share Therapy focused marketing • 2,700+ sales representatives covering 140,000 specialist doctors 1999 Market Share indexed to 100 for all companies Creating Lasting Value - Investor Presentation 15

  16. Therapy Focused Marketing Oncology Cardiology, Diabetology Gastroenterology, Orthopedics Ophthalmology Gynecology Psychiatry, Neurology Rheumatology, Dermatology Asthma, COPD Interventional Cardiology Fertility, Gynecology,Urology Delivering promotional message to specialty customers. Creating Lasting Value - Investor Presentation 16

  17. Preferred Choice of Doctors Leadership in key therapeutic areas* Top 10 Brands contribute 15% Of India Sale *Ranks based on prescription share Creating Lasting Value - Investor Presentation 17

  18. 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 Creating Lasting Value - Investor Presentation 18

  19. US Generics Integrated generic manufacturer with flexibility for manufacture onshore / offshore ApprovalsTherapy wise summary Caraco Pharmaceutical Laboratories Ltd. The 100% owned US generics subsidiary, markets own and Sun Pharma ANDAs Sun Pharmaceutical Industries, Inc. (SPI) A wholly owned subsidiary of Sun Pharma in US Taro Pharmaceutical Industries Ltd. The 66% owned subsidiary of Sun Pharma As on Mar-11 Creating Lasting Value - Investor Presentation 19

  20. ANDA Pipeline : Significant ramp up 400 377 350 300 250 225 207 200 177 142 150 95 100 84 69 59 53 40 50 29 20 15 0 Mar-05 Mar-06 Mar-07 Mar-08 Mar-09 Mar-10 Mar-11 Cumulative Products Filed Cumulative Products Approved Products Filed and Approved Status As of Mar 11, ANDAs for 152 products await approval (including 20 tentative approvals)‏ Sun Pharma 100 Products pending(with 12 tentative approval)‏ Caraco 29 Products pending (with 4 tentative approval) Taro 23 Products pending (with 4 tentative approval) (Taro numbers added for Mar 2011) Creating Lasting Value - Investor Presentation 20

  21. US Generics 16 ANDA Approvals in last 1 year • 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 • Sumatriptan Succinate Injection • Cetirizine HCl Oral Solution • Imiquimod Cream 5% • Atomoxetine HCL Capsules • Desloratidine Tablets • Mupirocin Ointment • Naratriptan Tablets • Ciclopirox Shampoo Creating Lasting Value - Investor Presentation 21

  22. 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 Creating Lasting Value - Investor Presentation 22

  23. 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 Creating Lasting Value - Investor Presentation 23

  24. 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 Creating Lasting Value - Investor Presentation 24

  25. International Branded Generic Markets Less Regulated Markets Replicating the speciality template • 40 countries • 600 strong local sales force promotes brands to doctors • Product basket width and technology based products as growth drivers CIS Countries China Mexico Myanmar Brazil Sri Lanka Focus Markets South Africa Map Not to Scale Other Markets Creating Lasting Value - Investor Presentation 25

  26. 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. Creating Lasting Value - Investor Presentation 26

  27. Speciality API • Strong regulatory capability • 207 DMF / CEP filed • 127 approved • (Including Taro) • High Margin Regulated Markets • Business largely with end users in regulated markets • Over 160 speciality APIs across 8 plants Creating Lasting Value - Investor Presentation 27

  28. Strong Regulatory Capability International level quality processes and documentation

  29. Integrated product dev and manufacturing network Vertically integrated network across four continents enabling high quality, low cost and a quick market entry across the geographies Tiszavasvari(Hungary) Ontario (Canada) Detroit Bryan Jammu Cranbury Tennessee Sikkim Plant Israel Bangladesh Plant Iztapalapa (Mexico) Ahmednagar Maduranthakam Goiânia (Brazil) Halol Karkhadi Ankleshwar Panoli Silvassa Dadra Sun Pharma Taro Pharmaceuticals API and Formulations API Formulations Global networked facilities are FDA, EMEA, TGA approved Creating Lasting Value - Investor Presentation 29 29

  30. Finished Dosage Manufacturing 15 Manufacturing sites worldwide • India : 6, US : 3, Canada : 1 • Capacities available for a variety of finished dosage Creating Lasting Value - Investor Presentation 30

  31. API Manufacturing APIKey Plants 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 Hungary & Tennessee (US) Panoli & Ahmednagar (both India)‏ • International regulatory approvals: USFDA, European • Stand alone units for peptides, anti-cancer, steroids, sex hormones • Controlled substances manufacture Creating Lasting Value - Investor Presentation 31

  32. Agenda 5 4 3 2 Management & Governance Financials 1 Research &Development BusinessOperations Strategy &Approach RevenueComposition Growth Geographies API, FinishedDosage &Manufacturing History &Profile Key Acquisitions Creating Lasting Value - Investor Presentation 32

  33. Research and Development Immediate termANDA, DMF, Products for India Medium termDrug delivery systems Balancing the risk • 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 Baroda Creating Lasting Value - Investor Presentation 33

  34. Agenda 5 4 3 2 Management & Governance Financials 1 Research &Development BusinessOperations Strategy &Approach RevenueComposition Growth Geographies API, FinishedDosage &Manufacturing History &Profile Key Acquisitions Creating Lasting Value - Investor Presentation 34

  35. Corporate Governance Audit Committee Committee chaired by Keki Mistry comprises Hasmukh Shah and S. Mohanchand Dadha Our philosophy on corporate governance envisages working towards high levels of transparency, accountability and consistent value systems across all facets of operations Eminent Independent Directors Hasmukh ShahChairman Gujarat Gas Former Chairman and Managing Director, IPCL Keki MistryVice Chairman and CEO, HDFC S. Mohanchand DadhaFormer Chairman & Managing Director, TDPL Ashwin Dani Vice Chairman and Managing Director, Asian Paints Ltd. Creating Lasting Value - Investor Presentation 35

  36. Agenda 5 4 3 2 Management & Governance Financials 1 Research &Development BusinessOperations Strategy &Approach RevenueComposition Growth Geographies API, FinishedDosage &Manufacturing History &Profile Key Acquisitions Creating Lasting Value - Investor Presentation 36

  37. Shareholding Pattern Individuals and Others 6% Bodies Corporate 5% Financial Inst / Banks 4% Mutual Funds 3% FIIs / Foreign Banks 18% Promoter and promoter group 64% as 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 • Total Outstanding Share - 1035 Mn • Total Free Float Share - 375 Mn • Daily Average Trading - 1.08 Mn Creating Lasting Value - Investor Presentation 37

  38. Financials Market Capitalisation Rs. 514 billion / USD 11.53 billion* Figures in Rs million *Exchange Rate : 1 USD = Rs 44.72 Creating Lasting Value - Investor Presentation 38

  39. Financial Ratios 2006-07 2007-08 2008-09 2009-10 2010-11 Growth (%) 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 Others Debt / 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 * Adjusted for stock split Creating Lasting Value - Investor Presentation 39

  40. 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

  41. For updates and specific queries, please visit www.sunpharma.com or feel free to contact Uday Baldota Tel : +91 22 6645 5645, Ext 605 Tel Direct : +91 22 66455605 Mobile : +91 98670 10529uday.baldota@sunpharma.com Mira Desai Tel : +91 22 6645 5645, Ext 606 Tel Direct : +91 22 66455606 Mobile : +91 98219 23797mira.desai@sunpharma.com © 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. Creating Lasting Value - Investor Presentation 41

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