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A HEALTHY PRESCRIPTION
Wanbury Ltd.
(524212) (Rs. 145/-):
Background: Wanbury Ltd. was formed with the merger of Pearl Organics and Wander Pvt Ltd. on October 1, 2003. Wanbury operates in two segments of Pharma chain, namely, APIs (Bulk Activities) and Formulations. The company has 3 API manufacturing facilities located in Maharashtra and AP of which 2 are USFDA approved for multiple products.
API Business: Wanbury is the world's largest producer of metformin. It sells metaformin to leading global generic players in over 40 countries including both regulated and unregulated markets. It has strong presence in North America, Latin America and Europe. The company's composite revenue from Europe and US accounts for around 35% of the total exports.
The company has also forayed into contract research and manufacturing services (CRAMS). It already has Pfizer as its client for two products viz.- gabapentene intermediate and mefenamic acid. Five more companies have reportedly visited its Plant and may enter into a deal for CRAMS with the company. The company is expected to come up with 14 products in FY2006 and has recently filed 4 DMFs with USFDA in the field of Cardiovascular, Central Nervous System, Anti-Inflammatory Segment.
Formulations: The company is focusing on domestic ethical brands. The company strongly focuses on Pediatrics and Gynecology areas.
The company is also planning new products pipeline in a number of new segments like Pain Management, Neutraceuticals, etc.
Financial Performance:
FY05 9MFY06 FY06E FY07E FY08E
Sales 72.00 72.50 130.00 190.00 275.00
Net Profit 8.24 8.60 16.50 26.70 38.00
Equity 9.49 9.49 12.75 12.75 12.75
EPS (Rs.) 8.68 12.95 20.95 29.80
Company has recorded spectacular growth in FY05 and FY06 so far. For FY05, its turnover increased by 40% to 72 crs. and NP galloped by 450% to 8.24 crs. EPS stood at 8.68.
For 9MFY06, it has already achieved sales of 72.50 crs. with NP of 8.60 crs. 9MFY06 performance is better than performance of entire FY05. Metformin with a global API sales of 15,000 tons is growing at 20% p.a. Company caters to over 14% of the global market with its production of over 2100 tons p.a. With capacity being enhanced, company is in a position of manufacturing 3600 tons p.a.
Acquisitions:
a) Wanbury has acquired PPIL which has a facility at Tarapur and another large partly finished facility at Patalganga. The latter has been built for regulated markets. Completion of this facility with add another USFDA approvable facility to the company.
b) Wanbury has acquired a 51% stake in the Andhra Pradesh based Doctors Organic Chemicals Limited (DOCL), a company having a multi-product USFDA approved API facility spread over an area of 18 acres.
Post acquisition and as part of the restructuring process, now Wanbury has taken a step further and settled two large financial institutions of DOCL - Industrial Development Bank of India Limited (IDBI) and Industrial Financial Corporation of India Limited (IFCL) which had a cumulated debt of Rs. 19.20 crore and Rs. 4.81 crore respectively as per the audited September 2005 book of DOCL. In fact, Wanbury has managed to complete the process of settlement of debts of IDBI and IFCI for Rs. 6.48 crore and Rs. 3.22 crore respectively. This lays the foundation to carry forward the eargerly enisaged merger process through BIFR and to consolidate the working of DOCL with Wanbury. This merger would bring a valuable addition of products and capacities to the existing Wanbury basket. In the post merger scenario, being a multi-product USFDA approved facility, DOCL would help Wanbury expedite time to market by approximately 3 to 4 years for the regulated markets of US and Europe.
Future Prospects: Besides Metformin, over the years, Wanbury has created a strong product base and has a strong pipeline of existing and new products selected for sale in regulated markets. These include: Glucosamine, Mefenamic Acid, Gabapentene, Tramadol, Amitryiptyline, Promethazine, Sertraline, Paroxetine, Hemihydrate, Carvedilol, Desloratidine, Losartan Potassium, Salsalate, Ibuprofen etc, to name a few.
The company is in advanced stages of merging Pharmaceutical Products of India Limited (PPIL) in the API space which would manifold increase the manufacturing capacity of the company. PPIL has a facility at Tarapur and another large partly finished facility at Patalganga.
On the formulations front, Wanbury is on a growth path with a host of brands that have a strong presence with pediatricians, gynecologists, orthopedics and general practitioners.
With expansion of its own production facility and acquisition of above 2 units, Wanbury will report scorching pace of growth for next 2-3 years atleast. Promoters hold 61.7% equity in the company. 52 week high is Rs. 267/- which means that, CMP has almost bottomed out and scrip is ready to flare up sharply in near future.
Stock is trading just 7 times of FY07E EPS and 5 times of FY08E EPS. Scrip is one of the most underpriced in Pharma Industry. Share price is likely to go upto Rs. 225/- by July '06. It can further go upto Rs. 425/- in less than 24 months. Buying in big lots recommended
Wanbury Ltd.
(524212) (Rs. 145/-):
Background: Wanbury Ltd. was formed with the merger of Pearl Organics and Wander Pvt Ltd. on October 1, 2003. Wanbury operates in two segments of Pharma chain, namely, APIs (Bulk Activities) and Formulations. The company has 3 API manufacturing facilities located in Maharashtra and AP of which 2 are USFDA approved for multiple products.
API Business: Wanbury is the world's largest producer of metformin. It sells metaformin to leading global generic players in over 40 countries including both regulated and unregulated markets. It has strong presence in North America, Latin America and Europe. The company's composite revenue from Europe and US accounts for around 35% of the total exports.
The company has also forayed into contract research and manufacturing services (CRAMS). It already has Pfizer as its client for two products viz.- gabapentene intermediate and mefenamic acid. Five more companies have reportedly visited its Plant and may enter into a deal for CRAMS with the company. The company is expected to come up with 14 products in FY2006 and has recently filed 4 DMFs with USFDA in the field of Cardiovascular, Central Nervous System, Anti-Inflammatory Segment.
Formulations: The company is focusing on domestic ethical brands. The company strongly focuses on Pediatrics and Gynecology areas.
The company is also planning new products pipeline in a number of new segments like Pain Management, Neutraceuticals, etc.
Financial Performance:
FY05 9MFY06 FY06E FY07E FY08E
Sales 72.00 72.50 130.00 190.00 275.00
Net Profit 8.24 8.60 16.50 26.70 38.00
Equity 9.49 9.49 12.75 12.75 12.75
EPS (Rs.) 8.68 12.95 20.95 29.80
Company has recorded spectacular growth in FY05 and FY06 so far. For FY05, its turnover increased by 40% to 72 crs. and NP galloped by 450% to 8.24 crs. EPS stood at 8.68.
For 9MFY06, it has already achieved sales of 72.50 crs. with NP of 8.60 crs. 9MFY06 performance is better than performance of entire FY05. Metformin with a global API sales of 15,000 tons is growing at 20% p.a. Company caters to over 14% of the global market with its production of over 2100 tons p.a. With capacity being enhanced, company is in a position of manufacturing 3600 tons p.a.
Acquisitions:
a) Wanbury has acquired PPIL which has a facility at Tarapur and another large partly finished facility at Patalganga. The latter has been built for regulated markets. Completion of this facility with add another USFDA approvable facility to the company.
b) Wanbury has acquired a 51% stake in the Andhra Pradesh based Doctors Organic Chemicals Limited (DOCL), a company having a multi-product USFDA approved API facility spread over an area of 18 acres.
Post acquisition and as part of the restructuring process, now Wanbury has taken a step further and settled two large financial institutions of DOCL - Industrial Development Bank of India Limited (IDBI) and Industrial Financial Corporation of India Limited (IFCL) which had a cumulated debt of Rs. 19.20 crore and Rs. 4.81 crore respectively as per the audited September 2005 book of DOCL. In fact, Wanbury has managed to complete the process of settlement of debts of IDBI and IFCI for Rs. 6.48 crore and Rs. 3.22 crore respectively. This lays the foundation to carry forward the eargerly enisaged merger process through BIFR and to consolidate the working of DOCL with Wanbury. This merger would bring a valuable addition of products and capacities to the existing Wanbury basket. In the post merger scenario, being a multi-product USFDA approved facility, DOCL would help Wanbury expedite time to market by approximately 3 to 4 years for the regulated markets of US and Europe.
Future Prospects: Besides Metformin, over the years, Wanbury has created a strong product base and has a strong pipeline of existing and new products selected for sale in regulated markets. These include: Glucosamine, Mefenamic Acid, Gabapentene, Tramadol, Amitryiptyline, Promethazine, Sertraline, Paroxetine, Hemihydrate, Carvedilol, Desloratidine, Losartan Potassium, Salsalate, Ibuprofen etc, to name a few.
The company is in advanced stages of merging Pharmaceutical Products of India Limited (PPIL) in the API space which would manifold increase the manufacturing capacity of the company. PPIL has a facility at Tarapur and another large partly finished facility at Patalganga.
On the formulations front, Wanbury is on a growth path with a host of brands that have a strong presence with pediatricians, gynecologists, orthopedics and general practitioners.
With expansion of its own production facility and acquisition of above 2 units, Wanbury will report scorching pace of growth for next 2-3 years atleast. Promoters hold 61.7% equity in the company. 52 week high is Rs. 267/- which means that, CMP has almost bottomed out and scrip is ready to flare up sharply in near future.
Stock is trading just 7 times of FY07E EPS and 5 times of FY08E EPS. Scrip is one of the most underpriced in Pharma Industry. Share price is likely to go upto Rs. 225/- by July '06. It can further go upto Rs. 425/- in less than 24 months. Buying in big lots recommended