AARUDHRA FINANCIAL SERVICES ADVIK LABORATORIES LTD 15-July-2005 Introduction: Advik Laboratories Ltd is a WHO – GMP certified company, which was setup from the ground level with the objective of achieving USFDA standards of Quality. The company has a technical collaboration with PFC Pharma Focus Ltd. Switzerland. The company’s products range from ethical, generic drugs and over the counter (OTC) drugs in various formulations. We rate the stock as an Out performer. CMP – Rs.13.3 BSE Code 531686 NSE Code Not Listed 52 Week High 19.73 52 Week Low 6.05 FV / Share 10 BSE Sensex 7271.54 URL www.advikindia.com Shareholding Pattern (in%) Promoters Foreign Promoters Mutual Funds Banks FIIs Corporates Public NRI / OCBs Others 25.43 00.00 00.00 00.00 00.00 08.89 64.81 00.40 00.46 Source: BSE AARUDHRA FINANCIAL SERVICES [email protected] AARUDHRA FINANCIAL SERVICES Advik Laboratories Limited Highlights of the company: Advik Laboratories Ltd is a WHO – GMP certified company, which was setup from the ground level with the objective of achieving USFDA standards of Quality. The company has a technical collaboration with PFC Pharma Focus Ltd. Switzerland. The company’s products range from ethical, generic drugs and over the counter (OTC) drugs in various formulations. Strengths: The company is into the manufacture of ethical medicine for prevention and treatment of anemia, fracture, pregnancy & lactation, hyper acidity, dyspepsia, gastritis, heartburn, primary dysmenorrhea, lower respiratory tract infections, urinary tract infections, sinusitis, and chronic bacterial prostatitis. The company is also into manufacturing of generic medicine like antifungals, anti allergic, analgesic, antipyretic, anti-inflammatory, anti hypertensives, antimalarials, corticosteroids, erectile dysfunction, gastrointestinal agents, sedatives etc. The company’s generic products are certified by WHO-GMP. The company is also undergoing expansions to meet the provisions of UK – MCA. The company manufactures products of international quality. The company’s plant was setup from the ground level with the objective of achieving USFDA standards of quality. The company is also focusing on biotechnology sector. The company has setup an R&D center in Gurgaon. 15-July-2005 2 AARUDHRA FINANCIAL SERVICES Advik Laboratories Limited Weaknesses: The company hasn’t achieved its forecasted sales target. The company faces competition from established players. The company may also face problems due to export competitiveness, paucity of skilled manpower and introduction of new drugs post 2005. Clients: The company markets its range of ethical & generic products to countries in Middle East, South America and Africa. The products are either sold under its own brand name or through local companies in these countries. The company’s products are WHO – GMP approved. Business Mix: Ethical: • • • • • • • Wibatol Wibatol – O Twosum Majispa Arfa Gel Stibomin Chewfe – C The company manufactures the above ethical medicines for prevention and treatment of anemia, fracture, pregnancy & lactation, hyper acidity, dyspepsia, gastritis, heartburn, primary dysmenorrhea, lower respiratory tract infections, urinary tract infections, sinusitis, and chronic bacterial prostatitis. 15-July-2005 3 AARUDHRA FINANCIAL SERVICES Advik Laboratories Limited Generic: • • • • • • • • • • • Cefadroxil Tablets Cefalexin Capsules Ciprofloxacin Amoxicillin Floncip Advoflox Zin-Ten Afuzole Paracetamol BP Ibuprofen Nulide etc. The company is also into manufacturing of above generic medicines like antifungals, anti allergics, analgesic, antipyretic, anti-inflammatory, anti hypertensives, antimalarials, corticosteroids, erectile dysfunction, gastrointestinal agents, sedatives etc. 15-July-2005 4 AARUDHRA FINANCIAL SERVICES Advik Laboratories Limited Financials: D es cr ipt ion 2 0 0 3 -2 0 0 4 Net Sales 2 0 0 4 -2 0 0 5 Ch an ge 201.08 63.15 - 68.59 Other Income 1.93 1.27 - 34.20 Total Income 203.01 63.15 - 68.89 Expenditure 195.63 60.76 - 68.94 Operating Profit 5.44 2.39 - 56.07 Interest 3.76 0.08 - 97.87 Gross Profit 3.62 721.2 19822.65 Depreciation 3.42 3.3 - 3.51 Profit before Tax 0.19 0.28 47.37 Tax 0.01 0 - 100.00 Profit after Tax 0.18 0.28 55.56 Net Profit Equity Capital EPS 0.18 0.9 400.00 93.53 93.53 0.00 0.02 0.03 50.00 The company has reported a negative growth in sales for the year ending March 2005 compared to March 2004. The net profit grew by 50% and the EPS grew by Rs.0.01. Competitors: • • Orchid Chemicals & Pharmaceuticals Ltd Shasun Chemicals & Drugs Ltd Shareholding Pattern: Category Promoter's Holding Sub Category I ndian Pr omoter s For eign Pr omoter s 0 3.4 2378802 25.43 Mutual Funds and UT I 0 0 B anks , FI s , I ns ur ance Co.s , Centr al / S tate Govt. / NonGovt. I ns titutions 0 0 FI I s 0 0 S u b T ot al Pr ivate Cor por ate B odies I ndian Public 0 0 831488 8.89 6062366 64.81 NRI / OCB s 37271 0.4 Any Other 43473 0.46 S u b T ot al 6974598 74.57 9353400 100 GR AN D T OT AL 15-July-2005 22.03 317887 S u b T ot al Others 2060915 % Holding Mar 2005 0 Per s ons Acting in Concer t Institutional Investors No. of Securities Held March 2005 5 AARUDHRA FINANCIAL SERVICES Advik Laboratories Limited Share Holding Pattern 0% Indian P romoters F oreign P romoters 0% 22% P ers ons Acting in Concert Mutual F unds and UT I 0% 3% 0% 0% 0% 66% 9% B anks , F Is , Ins urance Co.s , Central / S tate Govt. / Non-Govt. Ins titutions F IIs P rivate Corporate B odies Indian P ublic NR I / OCB s Any Other Stock Performance: The stock has hit a high of Rs.19.73 and a low of Rs.6.05. The stock has been trading in a range of Rs.13 and Rs.16 for the past few months. Key Ratios: K E Y OP E R AT I N G R AT I OS Y ear E n d Mar -0 5 0.03 Mar 04 0.02 Mar 03 2.64 Mar 02 5.13 Mar 01 1.62 EPS (Rs) B ook Val u e (CE R sP) S ( R s .) D i vi den d 12.59 12.56 12.52 10.43 12.88 0.43 0.39 2.17 - 1.13 2.65 0% 0% 0% 0% 0% OP M 3.78% 2.70% 10.90% 6.24% 13.71% NP M 0.44% 0.08% 16.17% 13.82% 7.30% 15-July-2005 6 AARUDHRA FINANCIAL SERVICES NP M 0.44% 0.08% 16.17% Advik Laboratories Limited 13.82% 7.30% Industry Outlook: The company is into manufacturing of ethical and generic drugs for local and export markets. The company’s plants adhere to US FDA quality standards and the products are WHO – GMP certified. The company’s expansion plans, exports and R&D initiatives should a dd to the topline and in-turn improve the profitability. Valuation: The company is expanding its capacity and has laid thrust on exports. The company should hugely benefit from the outsourcing of manufacturing of pharmaceutical products immensely. The company’s focus on biotechnology products and contract manufacturing should lead to huge benefits. We expect the company to produce improved results in the coming quarters and scale new highs. The company is turning around and would also be a takeover target for MNCs who are eyeing cheap outsourcing companies with good quality standards. We give an Out performer rating to the company. Disclaimer: This document has been prepared by M/s. AARUDHRA FINANCIAL SERVICES and is meant for use of the recipient only and is not for circulation. This document should not be reported or copied or made available to others. The recommendation should not be taken or considered as an offer to sell or buy any security. The information contained herein is obtained and collated from different sources believed to be reliable and we do not represent it as accurate or complete and it should not be relied upon as such. The opinion expressed or estimates made are as per the best judgement of our analysts during the preparation of this report and are subject to change without any notice. M/s AARUDHRA FINANCIAL SERVICES along with its associated companies / officers / employees may or may not, have positions in, or buy and sell securities referred to herein. Please rely on your personal decision to buy/sell any security. 15-July-2005 7