Daily Brief India: Sun Pharmaceutical Industries, Coal India Ltd, Bharti Airtel and more

• Sun Pharmaceutical Industries (SUNP IN) (SPIL) announced the plan to acquire Checkpoint Therapeutics (CKPT US), a commercial stage immunotherapy and targeted oncology company, for ~$200M.
• In December, Checkpoint has received FDA approval for its maiden drug, Unloxcyt (cosibelimab), for the treatment of certain type of skin cancer. Unloxcyt has peak sales estimate of $1.6B.
• SPIL’s offer for Checkpoint seems compelling and provides superior risk-adjusted value. However, the acquisition will not be near-term value generator for SPIL, which doesn’t have good track record for acquisition.

• COAL’s production growth during Apr-Feb 25 has slowed to 1.5% yoy due to a high base effect and is unlikely to grow significantly in the near future
• Regulated pricing mechanism means low correlation to international price movements. E-auction (10-12% of volumes) prices crash -25% yoy in line with international trends, impacting profitability
• Single digit PE is in line with historic multiples. Wage renegotiations due in June 2026, rising coal production from captive producers, surge in renewable capacities are headwinds

Bharti Airtel is the second-largest telecom player in India, with a c. 30% market share. It also has significant operations in Africa, and to a smaller extent Bangladesh and Sri Lanka. The largest shareholders are Bharti Enterprises (42%) and Singtel (14%). Bharti Enterprises was founded/owned by Sunil Bharti Mittal. It is one of India’s first conglomerates, with interests in telecommunications, space, insurance, real estate, hospitality and food.

We view Bharti Airtel as “Low Risk” on the LARA scale, mainly given its strong market position as the second-largest player in India’s telecom industry. The company owns robust network infrastructure across the country, with a broad customer base. We also note positively the improving industry outlook, with rationalising competition and industry consolidation benefiting Bharti Airtel, along with improving regulatory conditions. The company is committed to prudent balance-sheet management and stable leverage. However, capex requirements will likely remain substantial given Bharti Airtel’s 5G rollout, with a risk that capex will be higher than projected.