Category Archives: Multibagger

Multibagger Stock – Colgate-Palmolive (India) Ltd.

Posted on by

Multibagger Stock - Colgate-Palmolive (India) LtdColpal:

  • Colgate-Palmolive (India) Ltd was incorporated in the year 1937. In the year 1983, the company introduced their successful product Colgate Plus toothbrush in the market. In the year 1988, CPIL received a license for producing 24,000 tonnes per annum of fatty acids.
  • They also registered with DGTD for production of 30,000 tonnes of toilet soap per annum. In June 1988, the company established a wholly owned subsidiary at Hetanda in Nepal to manufacture the toothpaste and tooth powder initially.
  • In the year 1991, the company launched new Colgate Gel Toothpaste, Palmolive Extra Care and new Palmolive soap. They also re-launched a high quality Colgate Plus and other toothbrushes.
  • In the year 1994, the company acquired the oral hygiene business of Hindustan Ciba-Geigy Ltd.
  • In the year 1996, the company introduced the Colgate fresh stripe toothpaste and Palmolive naturals soap in personal care products segments, Keratin Treatment Shampoo and Palmolive optima in Hair care segment. Also, they established a modern facility at Aurangabad to manufacture Dicalcium phosphate, a key ingredient for toothpaste.
  • In the year 1998, the company launched Colgate Double Protection toothpaste for the entire family.
  • They launched the ad campaign for their new product Colgate Double Protection toothpaste in competition with rival brand Pepsodent from the Hindustan Lever stable. In the year 1999
  • In the year 2000, the company introduced two new variants to their Palmolive Naturals soap range and revitalised their sandalwood soap. Also, they launched two new variants in their Palmolive Naturals range of beauty soap lime and milk cream. The company re-launched their Colgate Gel as Colgate Fresh Energy Gel. During the year
  • During the year 2000-01, the company launched Colgate Herbal Toothpaste, Economy Toothpaste, Colgate Zig Zag Toothbrush, Colgate Navigator Toothbrush and Transparent Skin Care Soap in the year market
  • During the year 2001-02, the company re-launched Colgate Fresh Energy Gel with a refreshing falvour in a unique first-of-its king transparent tube and economy toothpaste
  • During the year 2003-04, the company launched Colgate Herbal White striped toothpaste with lemon extracts, eucalyptus and mint. They launched Colgate Navigator Plus Toothbrush in the market.
  • During the year 2004-05, the company established a state-of-the-art additional toothpaste manufacturing facility at Baddi, Himachal Pradesh to meet the growing market demand. The first phase of the facility became operational in April, 2005
  • During the year 2005-06, the company established Oral Care Category Innovation Centre works closely with the Technology Centres in India and U.S.A. to shape ideas into products that meet today’s consumer needs. They launched Colgate Advanced Whitening, Colgate Active Salt, Colgate MaxFresh Gel and Colgate Super Flexible Toothbrush with Unique Tongue Cleaning Feature
  • During the year 2009-10, the company acquired the remaining 25% shareholdings in Professional Oral Care Products Pvt Ltd and CC Health Care Products Pvt Ltd at a total consideration of Rs 2.40 crore and Rs 69.07 lakh respectively
  • In June 2011, Essel Propack Ltd signed a long-term agreement with the company to set up a plant in Goa at an investment of Rs 400 million.
  • The toothpaste volume market share has increased to 54.3% (Jan’12 – Sept’12) as against 52.3% for the same period of the previous year with strong volume growth of 11% through its flagship brands “Colgate Dental Cream”, “Colgate Active Salt”, “Colgate Total” , “Colgate Max Fresh”, its highest since 1998, a rare instance of a market leader gaining new ground. The Company has also registered a strong growth momentum in the toothbrush category with volume market share of 39.0% (Jan’12-Sept’12) The Mouthwash category continues its growth momentum with market share at 26.8% (Jan’12-Sept’12)
  • The Company has posted the revenue for the Q2FY13 at Rs.773.77 crore. The YoY growth is 17.73% and the QoQ growth is 5.12%. However, growth in underlying volumes has moderated from an average 13 per cent in the earlier quarters to 11 per cent in the Q1FY13. Colgate-Palmolive (India) net profit rose 45.55% to Rs 145.08 crore in the Q2FY13 as against Rs 99.68 crore during the Q2FY12. Operating margin is at 22.18% as against Q1 and 302bps up as compared to Q2 of last year.
  • Presently Colgate stock trading is at a valuation of 37.37x and 32.78x of FY13EPS of Rs.40.33 and FY14EPS of Rs.45.97. We Bet to buy Share at 1540 for Target 1800 in a time period 9-12 Months.

Multibagger Stock – CESC Ltd.

Posted on by

CESC Ltd., is a power utility company based in Kolkata belonging to the RP Goenka group.  Its history dates back to 1897 when it was Sterling Company and was given the license by the Government to generate and distribute power for Greater Kolkata reason. CESC has an assured coal linkage for 80% of its requirements. Also, 75% of the additional 1,200 MW capacity that it is building will be sold at regulated prices. Only the remaining portion needs to be sold at market rates. As of now it operates four plants with total capacity of 1225 MW from four generating units Budge (750 MW), Southern (135 MW), Titagarh (240 MW) and New Cossipore (100 MW).  It also has a large retail business domiciled in Spencer’s with a strong foot print in South India. It has some properties awaiting development.

CESC saw a revenue growth of 8.3% year on year mainly due to a 6% pass through a fuel cost.  It reported a 19.3% rise in Profit after tax to Rs. 136 Crs.  Retail profitability increased from an EBIDTA of Rs.30/- per sqft to Rs.57/- per sqft. It acquired a controlling stake in First Source a global BPO solution provider.

CESC is speedily completing its expansion at Chandrapur and Haldia which from early 2014 will generate additional power of 1200 MWs. It also looking for strategic investors in Spencer’s after the recent opening of retail to FDI. Better Outlook of retail subsidiary are:

  • Approved of FDI in retail will expedite turnaround in the financial performance of the company
  • Expanding operational area in Hyper and Super formats.
  • More focused approach by opening stanalone stores for is Apparel Brands apart from Fish & Meat stores.
  • To reduce the share of low margin grocery products it has shifted its Focus on private labels as well as International brands

We expect the company to report a growth of over 30% in profits in the next 3 years. We also expect revenue of the company to touch Rs 5,000 Crores and an EPS of Rs 50.00 for FY 2013. Giving a PE of 9 in this uncertain environment. We bet the stock to grab at 305 for Target 385 for the Time Period 9-12 Months.

Multibagger Mineral Producer Company Stock – NMDC Limited

Posted on by

NMDC LimitedNMDC:

  • The NMDC Limited is a state-controlled mineral producer of the Government of India. It is fully owned by the Government of India and is under administrative control of the Ministry of Steel. It is India’s largest iron ore producer and exporter producing about 30 million tons of iron ore from 3 fully mechanized mines in Chhatisgarh and Karnataka. It also operates the only mechanized diamond mine in the country at Panna in Madhya Pradesh. It was founded on 1958 & Head Quarters is at Hyderabad, Andhra Pradesh.
  • NMDC Ltd. is presently producing about 22.8 million tonnes of iron ore from its Bailadila sector mines and 6.98 million tonnes from Donimalai sector mines.
  • Strong back up of an ISO 9001 certified R&D centre, which has been declared as the “Centre of Excellence” in the field of mineral processing by the Expert Group of UNIDO.
  • NMDC is involved in the exploration of Iron Ore, Copper, Rock Phosphate, Lime Stone, Dolomite, Gypsum, Bentonite, Magnesite, Diamond, Tin, Tungsten, Graphite, and Beach sands.
  • NMDC Ltd has gained more than 3% on successful sale of 10 per cent stake in NMDC. After this offer for sale, NMDC’s free float will double to 20 per cent.
  • The government witnessed strong participation from foreign investors and managed to mop up Rs 6,000 crore from the sale of its 10% stake which is a positive move in NMDC. Before this, pattern is like this, 90 percent by government, 8 percent by the local institutions that is LIC 6 percent and some domestic institutions. So NMDC is likely to remain in upbeat mood.
  • NMDC is the first major PSU issue to sail through without requiring the help of LIC. There is still no breakout or nothing significant to indicate a buy on charts except fundamental valuations & reasons.
  • We are bet to Grab Share near 155 with Stop loss 135 for Target 180-200 in Time Period of 3-4 Months.

Multibagger Stock – Cipla Limited

Posted on by

CIPLA LIMITED:

Cipla Limited is an Indian pharmaceutical company, probably best-known outside its home country for pioneering the manufacture of low-cost anti-AIDS drugs for HIV-positive patients in developing countries. It has played a similarly prominent role in expanding access to drugs to fight influenza, respiratory disease and cancer. Founded by nationalist Indian scientist Khwaja Abdul Hamied as The Chemical, Industrial & Pharmaceutical Laboratories in 1935. It’s Head Quarters is at Mumbai.

Cipla has registered sharp numbers for the quarter ending September 2012. The revenue for the September 2012 quarter is pegged at Rs.2191.84 crore; about 23.86% up against Rs.1769.66 crores recorded during the year-ago period; driven by better product mix i.e. lower proportion of anti retrovirals, Lexapro benefits; price hikes and currency benefits. It gained Rs.26 crores on account of foreign exchange gain. Operating profit skyrocketed about 58% at Rs.676.95 crore vis-a-vis Rs.429.25 crores. Material cost at 36.75% of total sales decreased by 3.8% during Q2FY13 as compared to Q2FY12. PAT reported a handsome growth of 61.83% to Rs.500.01 crores from Rs.308.97 crores. Operating profit margins expanded sharply by 663 bps at 30.89% vis-a-vis 24.26% whereas NPM stood at 22.81% as against 17.46% YoY.

Family revenues grew by 13.5% to Rs.962 cr during Q2 FY13, up from Rs. 847 cr during Q2 FY12. The growth in domestic revenues was largely on account of growth in anti-asthma, antibiotics and cardiovascular therapy segments.

Exports of formulations grew by 38.2% to Rs.1039 cr during Q2 FY13, up from Rs.752 cr during Q2 FY12. Exports of APIs grew by 9.0% to Rs.174 cr during Q2FY13, from Rs.159 cr during Q2FY12. The growth in export revenues was primarily due to growth in anti-depressants, anti-ulcerant and anti-asthma segments.

Cipla received 2012 Thomas Reuters India Innovation Award.

Among strong product mix, increasing focus on exports, firm guidance and ramp up of its facilities, Cipla’s revenue visibility looks strong. We believe Cipla Ltd. is trading at an attractive valuation at 21.69x and 18.75x of FY13EPS of Rs.17.97 and FY14EPS of Rs.20.78. We Bet the Stock price to grab at 390 for Target 500. In time Period of 6-9 Months.

Multibagger Stock to Grab – Maruti Suzuki India Limited

Posted on by

MARUTI

About Company:

Maruti Suzuki India Limited referred to as Maruti, is a subsidiary company of Japanese automaker Suzuki Motor Corporation. It has a market share of 44.9% of the Indian passenger car market. It was the first company in India to mass-produce and sell more than a million cars. It is largely credited for having brought in an automobile revolution to India. It is the market leader in India, and on 17 September 2007, Maruti Udyog Limited was renamed as Maruti Suzuki India Limited. The company’s headquarters are on Nelson Mandella Road, New Delh and Manufacturing Plants at Gugon & Manesar in India.

Sales &Services:

Maruti 800 ,Omni, Gypsy, WagonR, Alto, Swift,Estilo, SX4, Swift DZire, A-star,Ritz Eeco, Alto, K10, Maruti Ertiga, Maruti XA Alpha, Maruti Alto 800.

Maruti Suzuki has 933 dealerships across 666 towns and cities in all states and union territories of India. It has 2,946 service stations (inclusive of dealer workshops and Maruti Authorised Service Stations) in 1,395 towns and cities throughout India. It has 30 Express Service Stations on 30 National Highways across 1,314 cities in India.

Other Projects:

In 2002 Maruti Suzuki provides vehicle insurance to its customers with the help of the National Insurance Company, Bajaj Allianz, New India Assurance and Royal Sundaram. The service was set up the company with the inception of two subsidiaries Maruti Insurance Distributors Services Pvt. Ltd and Maruti Insurance Brokers Pvt. Limited.

To promote its bottom line growth, Maruti Suzuki launched Maruti Finance in January 2002. Prior to the start of this service Maruti Suzuki had started two joint ventures Citicorp Maruti and Maruti Countrywide with Citi Group and GE Countrywide respectively to assist its client in securing loan.  Maruti Suzuki tied up with ABN Amro Bank, HDFC Bank, ICICI Limited, Kotak Mahindra, Standard Chartered Bank, and Sundaram to start this venture including its strategic partners in car finance. Again the company entered into a strategic partnership with SBI in March 2003. Since March 2003, Maruti has sold over 12,000 vehicles through SBI-Maruti Finance. SBI-Maruti Finance is currently available in 166 cities across India.

Financial Back Ground:

In Q2FY13 net revenues stood at Rs 83bn (+6% YoY, -23% QoQ) driven by better than anticipated improvement in average realizations (+16% YoY, -1% QoQ) while overall volumes declined -8.7% YoY/-22.1% QoQ. EBITDA Margins for the quarter came in-line with our estimate at 6.1% ( -20 bps YoY, – 120 bps QoQ). RM to sales at 79.6% increased +100 bps YoY/+180 bps QoQ impacted by adverse product mix (lower diesel share), higher overall discounts and adverse forex. This was offset by lower other expense to sales at 11.4% (-110 bps YoY/ -120 bps QoQ) which benefitted from lower royalty payment and operating expenses. Net Profit declined 5.4% YoY/ 46.3% QoQ to Rs 2.2 bn but was ~18% above.

FY14. We expect Maruti Suzuki to benefit from both capacity expansion in diesel cars and demand revival in petrol cars this should help clock a 17% volume growth in FY14. We build in 300 bps margin expansion in FY14 over Q2 levels driven by lower discount/car, richer product mix, operating leverage benefits and slight benefit from currency.

Estimates for FY13/FY14 upwards by 3%/8% driven largely by benefits of a richer product mix even as we largely hold on to volume growth expectation of 7%/17% in FY13/14. We believe that the current stock price fully discounts a favorable macro environment for the company in FY14 and see limited upside potential. Key risk to our investment argument remains a sharp improvement in the macro environment and favorable currency.

We Bet the Stock Grab at 1460 for stock target price 1580. Keep stop loss 1400 In time Period 5-6 Months. Long Term Target 1700.

Share to Grab – Rural Electrification Corporation

Posted on by

Rural Electrification Corporation

Company Overview:

  • Rural Electrification Corporation Limited (REC) is a leading public Infrastructure Finance Company in India’s power sector. The company finances and promotes rural electrification projects across India, operating through a network of 13 Project Offices and 5 Zonal Offices, headquartered in New Delhi. The company provides loans to Central/ State Sector Power Utilities, State Electricity Boards, Rural Electric Cooperatives, NGOs and Private Power Developers
  • REC is a Navratna Company functioning under the purview of the Ministry of Power – Government of India. The company is currently among the top 500 Global Financial Services brands by UK-based plc Brand Finance (Brand Finance @ Global Banking 500 for 2010). The company is also among the Forbes Global 2000 companies for 2010.

Business Operations:

  • REC’s business model spans across the value chain of power infrastructure financing including
  • Equipment finance,
  • Technical/ financial appraisal of project,
  • Project finance as well as short term or bridge loans for generation, intensive electrification, transmission, distribution, repair and maintenance,
  • Support functions like project monitoring, consultancy and advisory.
  • The company operates autonomously as a Central Public Sector Enterprise under the Ministry of Power, Government of India and also acts as nodal agency for expansive Government of India schemes for building electricity infrastructure.
  • Business operations in India are supported by a network of 19 offices headquartered in New Delhi.

Financial Performance:

  • REC had excellent results for Q1 FY13 with net profits up by 32% at Rs.880 crores. Net Interest Margin also saw a good improvement of 25% and now stand at 4.53. The cost of borrowing for REC was quite low at 8.1% since it raises about 80% of its borrowing from Tax free and Taxable bonds. The pace of disbursement was good with the Loan book going up by 25%.

Projects:

  • REC finances all types of Power Generation projects including Thermal, Hydel, Renewable Energy, etc. without limit on size or location. The company aims to increase presence in emerging areas like decentralized distributed generation (DDG) projects, and new and renewable energy sources to reach remote and difficult terrains not connected by power grid network.
  • In Transmission & Distribution (T&D), REC is primarily engaged in ascertaining financial requirements of power utilities in the country in the T&D sector along with appraising T&D schemes for financing. REC has financed T&D schemes for system improvement, intensive electrification, pump-set energization and APDRP Programme. The company is also actively involved in physical as well as financial monitoring of T&D schemes.
  • REC also offers loan products for financing Renewable Energy projects. The company has tied up a line of credit for EUR 100 mn (approximately Rs. 6000 mn) with KfW under Indo-German Development Cooperation for financing renewable energy power projects at concessional rates of interest. Eligible projects include Solar, Wind, Small Hydro, Biomass Power, and Cogeneration Power & Hybrid Projects.

Asset Quality:

  • State Government PSU’s form 84% of the Loan book of REC, the gross NPA was at the low of 0.46%. Despite wide spread worries about the repayment from State Governments, the payments were received without any difficulty.

Valuation:

  • In terms of valuation, the stock trades at a low PE of 7 on FY12 earnings and 6.1 on FY13 earnings based on an EPS of Rs.35 for FY13
  • Q2 Results on Nov 02, 2012
    • We Bet The Share to Grab at 215 for Target 270 In a Time Frame of 6-9 Months

Multibagger Stock Tip – Tube Investment of India Ltd.

Posted on by

TUBE INVESTMENT OF INDIA LTD.

  • Tube Investment of India Ltd. Belongs to Murugappa Group is a Chennai based Indian Conglomerate. Being a market leader in several of them it has a total of 28 businesses and has manufacturing facilities spread across 13 states in India.

It Has Classified in Four Business It Shows:

  • One is the engineering business where it produces precision tubes, which used in automotive industry and general engineering industry.
  • The second business is cycle business where company has acquired 30-31% of market share. Last year it sold about 4.5 million cycles.
  • Third is a metal formed product business wherein the company manufactures automotive chains, industrial chains and car doorframes. In the car doorframes business the company is a market leader with a market share of almost 60% and supplies to almost all the major passenger car manufacturers.
  • The fourth is a finance business – it holds 54.5% of equity stake in its subsidiary Cholamandalam Investment, the company does vehicle financing, home loans and as well as gold loan business. We can expect considerable increase in bottom-line due to Cholamandalam Investments.
  • Recently company has undertaken a capex of Rs 5 billion whose impact we will witness soon in upcoming years. Expectations Company has showed consistent growth in NPM & bottom-line. EPS has grown from 3.06 to 9.7 over five year’s period nearly 316%. For 2014-15, we are expecting the EPS to be around 19-20.
  • It Shows Expanding Triangle pattern at 165-170 levels. We Bet the Share Grab at 173 for Target 195 In Duration of 6-8 Months Target 225-250 For Long Time Traders in Period 1-2 Years.

Multibagger Stock Tip – Apollo Tyres

Posted on by

  • Apollo Tyres, mechanized automobile tyres, tubes and flap for Passenger Vehicles, Commercial Vehicles and Off Higway Tyre, have manufacturing presence through 9 units across India (Kerala, Tamil Nadu, Gujarat), Netherlands, Zimbabwe and South Africa.
  • India’s largest producer and exporter of passenger car tyres, its product portfolio comprises of 6 brands flagship Apollo, Dunlop (brand rights for 32 African countries), Vredestein, Regal and Kaizen for truck-bus tyres and Maloya passenger vehicle tyres. Company had bought South Africa-based Dunlop Tyres International Ltd in 2006 and Dutch tire-maker Vredestein Tires in 2009.
  • In the midst of capacity of 1,590 metric tonnes per day, Apollo commands about 40% market share in the Rs. 30,000 crore Indian tyre market, 70% of which is comprised of the top 5 players – Apollo, Birla, Ceat, JK Tyres and MRF.
  • Stand-in market, which makes up 70% of the India market, mirrors the company’s revenue pie, as it accounted for close to 73% of its annual revenues. It exports to over 118 countries and earns approximately one-third of its revenues from exports.
  • Since of 30th September 2012, promoters hold 43.37% in the company, having pruned their stake from 46.94% as of 30th June 2012. The company enjoys good institutional patronage, with 128 FIIs holding 22.80% stake in the company and 103 DIIs 11.23%. Among its shareholders, it counts marquee names such as Merrill Lynch (1.32%), CLSA (2.9%), ICICI Prudential (5.33%) among others.
  • During FY12, it reported consolidated sales of Rs. 12,153 crore, becoming the first Indian tyre company to cross the annual revenue milestone of over Rs 12,000 crore or US $ 2.5 billion. EBITDA for FY12 was at Rs. 1,299 crore, with EBITDA margin of 10.7%.
  • Apollo Tyers net profit for FY12 was Rs. 410 crore, resulting in an EPS of Rs. 8.13. Accounting for Rs. 327 crore of depreciation and Rs. 82 crore deferred taxes, its cash EPS was Rs. 16.23, on equity of Rs. 50.41 crore (face value Re. 1 each). For FY12, dividend of 50 paise per share was paid.
  • For Q1FY13, financial performance showed expansion in margins on near flat revenues. While consolidated sales were Rs. 3,165 crore, net profit jumped to Rs. 138 crore, leading to an EPS of Rs. 2.74 and cash EPS of Rs.4.59.
  • EBITDA for the first quarter of the year stood at Rs. 361 crore leading to EBITDA margin of 11.4%, up from FY12’s 10.7%. Net margins also expanded to 4.4% in Q1FY13 from 3.4% in FY12.
  • Apollo Tyers net worth, as on 30th June 2012, stood at Rs. 2,968 crore, leading to BVPS of Rs. 59. It has debt of about Rs. 2,550 crore.
  • The share price has corrected lately on fear of steep penalty from the Competition Commission of India (CCI) for alleged cartelization in the tyres industry. We believe that current price has corrected more than warranted, as the fine will not be as harsh as those imposed by CCI on DLF and cement companies previously.
  • The Party also plans to raise Rs. 800 crore via a qualified institutional placement (QIP) in November, for which the board approval is in place. To facilitate the same, FII investment limit in the company has also been hiked from 30% to 40%.
  • As well, news reports suggest that the company may acquire US $ 1.2 billion market cap and world’s 10th largest American tyre firm Cooper Tire & Rubber Company for about US $600-800 million (Rs. 3,200-4,200 crore), to tap the latter’s strong foothold in the global replacement tyre market.
  • Intended for FY13, Apollo (without effecting the potential acquisition) is expected to have an EPS and cash EPS of close to Rs. 12 and Rs. 22, respectively. This implies discounting the share price, based on yesterday’s closing price of Rs. 88, by PE multiple of 7.3 times on current earnings, and by just 4 times, based on expected current year cash earnings.
  • Better replacement demand, expanding margins, recent correction in stock price due to CCI penalty fears have made valuation attractive.
  • Our stock tip to bet the Share for grab at 85 for target 105 for 6 Months Time Frame. ONE YEAR TARGET 125.

Multibagger Stock Trade – RS Software for Electronic Payment Machinery Solutions

Posted on by

    • RS Software is a chief in providing machinery solutions to the electronic payment industry. Founded in 1991 to provide customized service solutions to the electronic payment industry. At present RS Software has emerged as a strong enterprise with a client base comprising of world’s top payment brands like Visa, Visa EU, Visa CEMEA, Maclane, Pemco, Vignon. It has carved out a niche to bring to the market place, the combination of its expertise in global outsourcing and the domain knowledge in electronic payment transactions.
    • RS Software reported a revenue growth of 31.76% and profit after tax growth of 32.4% in FY12. Total net operating revenues increased with 31.78%, from INR 188.3 Crs to INR 248.15 Crs. For Q1FY13, the company reported a revenue growth of 40.5%yoy and profit after tax growth of 80%yoy. Total net operating revenues increased with 31.78%, from Rs.188.3 Crs to Rs.248.15 Crs. Also, it outperformed the Indian software export industry growth by a factor of 1.5x in fiscal 2011-12.  Cash flows are strong and likely to grow in the future.
    • Departure to the fore, the electronic payments industry is approaching USD 300 billion. Payments companies spend a huge amount on technology infrastructure and reducing these costs by even one percent liberates millions of dollars for onward reinvestment. Consequently, many global payments organizations possess a technology infrastructure appetite that outpaces the growth of their business. R.S. Software is attractively positioned to capitalize on this global phenomenon.
  • RS Software at present maintains a RoE of ~32% and RoA of ~31% during FY12. Currently, the market values the company at a much lower multiple compared to its counterparts. The current stock trading at P/E of 6.3xFY13E whereas the industry P/E is 19.3xFY13E. With the EPS of 27, there are no perceivable risks in the stock except being a mid cap it does suffer from some volatility. We Bet RS Software market share Grab at Rs. 160 for the Target Rs. 300 in Time Frame of 6-8 Months.

Multibagger – Alembic Pharmaceuticals

Posted on by

ALEMBIC PHARMACEUTICALS

  • Alembic Pharmaceuticals, a medium upright integrated and research based pharma company, is part of the Alembic group (flagship company being Alembic Ltd., which holds 29.18% stake in the company) having interests in power generation, real estate, specialty chemicals & engineering solutions.
  • Alembic Pharma has many business segments such as active pharmaceutical ingredients (API), bulk pharma chemicals, formulations, herbal nutraceuticals, veterinary, contract research services, of which, domestic formulations accounts for the largest pie, with little over half of company revenues, followed by international API.
  • The company has formulations plant at Baddi in Himachal Pradesh. In the branded formulations space, company enjoys a strong presence in anti-infective, pain management, cough & cold. Besides thrust on cardiology, gynecology, diabetes, orthopedics, ophthalmology and rheumatology, it has newly launched dermatology division.
  • Enjoying market share of 1.62%, its 4 brands, viz. Azithral, Roxid, Althrocin, and Wikoryl, feature in the top 300 brands of the industry.
  • It operates its international division from 3 US FDA approved API plants and has cumulative ANDA filings of 49, with 20 approvals (including two tentative approvals), indicating a strong pipeline.
  • Since of 30th June 2012, its equity stood at Rs. 37.70 crore comprising of 18.85 crore shares of face value Rs. 2 each. Of this, promoter holding is 74.13%, institutional holding 7.62%, while balance 18.25% is public float.
  • For FY12, company reported consolidated income from operations of Rs. 1,466 crore and PAT of Rs. 130 crore, with EPS for the year of Rs. 6.90. This entails net margin of 8.9%. EBITDA for the year stood at Rs. 255 crore, entailing healthy margins of 17.3%.
  • Throughout the first quarter of FY13, company maintained consistency in its financial performance, with consolidated income from operations increased to Rs. 368 crore, up 7% QoQ from Rs. 343 crore in 3 months ended 31st March 2012.
  • For the period of Q1FY13, EBITDA stood at Rs. 61 crore, up from Rs. 50 crore in the immediately preceding quarter, strengthening margin to 16.6% from 14.7%. PAT jumped 51% to Rs. 31 crore, from barely Rs. 20 crore in Q4FY12. EPS for Q1FY13 was Rs. 1.64.
  • Since of 30th June 2012, company’s networth was Rs. 426 crore, while its current market cap is Rs. 1,338 crore. Company is expected to close FY13 with 10-12% top line growth and ~15% PAT growth, which leads to EPS of close to Rs 8 and PE of 9x. For FY14, expected top line is Rs 2,000 crore with EPS of about Rs 10.
  • We Bet the Share Grab Around Rs. 70 For The Target 90 in 12 Months Time Frame.