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Multi Baggers

Hem Securities

12.00 AM Mar 29th 2016

Unichem Labs

BSE ID : 506690     NSE ID : UNICHEMLAB

RECOMMENDED PRICE 218.70

PEAK FROM RECO 319.90 46.27%

CURRENT PRICE 271.00 23.91%

By combining strategic research and in-depth industry knowledge, Unichem aims to transform itself into a global pharmaceutical drug company with an increasing focus on cutting-edge research and developed markets. We initiate a 'BUY' on the stock with target price of Rs 290 with medium to long term investment horizon.

Unichem Laboratories Ltd.

Unichem Laboratories Ltd. is an international, integrated, specialty pharmaceutical company. It manufacturers and markets a large basket of pharmaceutical formulations as branded generics as well as generics in India and several other markets across the world. In India, the company is a leader in niche therapy areas of cardiology, neurology, orthopedics and anti-infectives.

Unichem is ranked 26th in the domestic formulations markets as per AWACS MAT December 2015 and is amongst the top #18 companies in representative (covered) market. The company’s 4 brands are being featured among top 300 brands.

The company has registered decent results for the quarter ending December 2015. The standalone revenues grew by 15.2% to Rs.306.26 crores vs. Rs.265.85 cr. in the year ago quarter. Operating profit zoomed at Rs.34.10 crores as against Rs.8.44 crores in the corresponding quarter last year. The adjusted net profit (before exceptional item) surged manifold at Rs.23.32 crore as against Rs.2.06 crore.

The price growth is around 7.5% to 8%, growth owing to new product is around 3% and the balance is on account of volume. Cumulative filings of ANDAs stood at 35 of which 20 ANDAs are approved (including 1 tentative approval). And Cumulative filings of DMFs stand at 43. The company has done two launches in the recent quarter ended and has entered into the Gliptin market by launching Teneligliptin.

Valuation

With strong traction in the US markets, focus to entry in new geographies, increased business driven by volume growth and continued dominance of key products of Unichem depicts the growth path of the company in times ahead. We believe the company is trading at an attractive valuation at 18.67x and 14.87x of consolidated FY16EPS of Rs.11.71 and FY17EPS of Rs.14.71. We initiate a 'BUY' on the stock with a target price of Rs.290 (appreciation of about 33%) with the medium to long term investment horizon.

For full details, Click on the attachment.

 

Disclosure of Interest Statement - Company Name

1. Analyst Ownership of the Stock - No

2. Hem & its Group Company Ownership of the Stock - No

3. Hem & its Group Companies' Director Ownership of the Stock - No

4. Broking relationship with company covered - No

Disclaimer & Disclosure: This document is prepared for our clients only, on the basis of publicly available information and other sources believed to be reliable. Whilst we are not soliciting any action based on this information, all care has been taken to ensure that the facts are accurate, fair and reasonable. This information is not intended as an offer or solicitation for the purchase or sell of any financial instrument and at any point should not be considered as an investment advise. Reader is requested to rely on his own decision and may take independent professional advise before investing. Hem Securities Limited, Hem Finlease Private Limited, Hem Multi Commodities Pvt. Limited, Directors and any of its employees shall not be responsible for the content. The person accessing this information specifically agrees to exempt Hem Securities Limited, Hem Finlease Private Limited, Hem Multi Commodities Pvt. Limited or any of its affiliates or employees from, any and all responsibility/liability arising from such misuse and further agrees to hold Hem Securities Limited, Hem Finlease Private Limited, Hem Multi Commodities Pvt. Limited or any of its affiliates or employees free and harmless from all losses, costs, damages, expenses that may be suffered by the person accessing this information due to any errors and delays. The companies and its affiliates, officers, directors, and employees, including persons involved in the preparation or issuance of this material may from time to time, have long or short positions in, and buy or sell the securities there of, company (ies) mentioned here in and the same have acted upon or used the information prior to, or immediately following the publication. Analyst Certification: The views expressed in this research report accurately reflect the personal views of the analyst(s) about the subject securities or issues, and no part of the compensation of the research analyst(s) was, is, or will be directly or indirectly related to the specific recommendations and views expressed by research analyst(s) in this report.

Unichem_PYT_HemSec.pdf

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