ICRA gives triple-A ratings to Sun’s borrowing plans

ICRA has assigned a long-term/short-term rating of [ICRA]AAA / [ICRA]A1+ to the long-term / short-term borrowing programme of Rs.2,800 crore of Sun Pharma Laboratories Limited (SPLL).

ICRA has reaffirmed the short-term rating of [ICRA]A1+ to the Rs.200 crore short-term Fund/Non-Fund based bank facilities of SPLL.

The assigned rating takes into consideration SPLL's status as a wholly-owned subsidiary of Sun Pharmaceuticals Industries Limited (rated [ICRA]AAA/Stable/A1 by ICRA), its strong operational and financial linkage with the parent company given its business profile that includes the domestic formulations business of Sun Pharma. The rating factors in SPLL's strategic position as an integral part of Sun Pharma's business by it constituting the entire domestic formulation sales (except the merged domestic business of Ranbaxy's).

Thus, the rating draws comfort from SPLL's well established presence in the Indian Pharmaceutical market which is supported by a well diversified product portfolio spanning across various therapeutic segments, a focus on the fast growing chronic and lifestyle related segment and a strong supply chain and distribution network. Further the domestic formulations' business is characterised by low product concentration, with Top 10 brands accounting for only ~15% of total revenues.