Thursday, December 18, 2014

Ajanta Pharma - 300% returns in a year, what is ahead?

Ajanta Pharma


Chairman: Mannalal Agarwal                                            
Vice Chairman : Purushottam Agarwal
Managing director : Rakesh Agarwal
Joint managing director : Yogesh Agarwal
Auditors : Kapoor & Parekh Associates
Cost auditors : Seveleari Khare & associates

HISTORY:
It was founded in 1973. It is an Indian multinational, engaged in development, manufacture and marketing. of pharmaceutical formulations worldwide, with its headquarters in Mumbai. Ajanta Pharma has rich experience of over 4 decades in pharma industry with impeccable record of quality.
BUSINESS MODEL:
APL has presence in the fast-growing specialty therapeutic segments of Cardiology, Dermatology, Ophthalmology and Pain management and has been consistently improving its ranking over the years. Company has been launching many new products for providing patient compliance and convenience, which is enabling it to enjoy superior ranking in its therapeutic segments and leadership in some of the sub-therapeutic segments it operates in.
Company’s clear focus on specialty segments of Ophthalmology, Dermatology and Cardiovascular has enabled it to continue to grow at much higher rates over industry average growth rate of the Indian Pharmaceutical Market (IPM) for last 5 years.
Company has  300 scientists who are working for making innovative products. Employee cost of the company is 13% of sales.
FINANCIAL:
Ajanta Pharma Limited has been listed on Forbes Asia's 'Best Under a Billion' 2014 list.
Financial Report for FY 2013-2014
In Crores

2013
2014
GROWTH
Sales
  8,392.00
 11,099.20
32%
Total Income
     936.44
    1,222.05
30%
EBIT
     224.49
       368.75
64%
PBT
     176.79
       329.85
87%
PAT
     112.11
       233.88
109%
EPS
        31.91
          66.54
109%
A dividend of Rs. 10 per equity share on the face value of Rs. 5 was given for the year ended 31st March 2014

Quarterly Report
In Crores

JAS'13
JAS'14
GROWTH
SALES
  2,798.30
    3,373.00
21%
TOTAL INCOME
  2,861.30
    3,532.00
23%
PBT
     792.60
    1,130.90
43%
PAT
     558.10
       786.30
41%
EPS
        15.79
          22.35
42%

FUTURE GROWTH:
According to me, the stock price of this company will rise to about 30-40% because most of the resources are allocated towards R & D. Ajanta Pharma has introduced more than 100 products which were introduced for the first time, hence there is scope for invention of more products in the future which will eventually bring more profits to the company. There has also been continuous growth every year in the company’s financials for the last 5 years.
Ajanta Pharma was trading at 888 on 10 jan, 2014 and is currently trading at almost thrice in a year time.
Company is currently trading at Rs.2417 at 31.52PE whereas the industry PE is 23.55 which is fair considering a growth rate of 42% in EPS in last quarter.
Net Profit Margin is approx 20% is very good.
We are expecting the share to go upto Rs.3000 on estimated EPS of Rs.100 at 30 PE


Presented by: Athish Mendon, MMS student of SVIMS college



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