SML Isuzu - Ride it for Medium Term

“SML ISUZU Limited manufactures and sells light commercial vehicles for goods and passenger applications in India. Swaraj Mazda, incorporated in 1983 as Swaraj Vehicles, is engaged in manufacturing of vehicles for goods and passenger applications. In 1984 the company entered in a joint venture with Punjab Tractors, Mazda Motor Corporation and Sumitomo Corporation, Japan for the manufacture of light commercial vehicles (LCVs). Thus the name of the company was changed to Swaraj Mazda. Recently the company name changed to SML ISUZU Limited early name was Swaraj Mazda Limited on January 4, 2011. SML ISUZU Limited was founded in 1983 and is based in Chandigarh, India. SML ISUZU Limited operates as a subsidiary of Sumitomo Corporation. Company manufactures a range of vehicles such as trucks, buses and ambulances. The company has launched products like 4WD, Samrat, Sartaj, Dual Cab, Supreme-8 tonner, Truck- Super 12, Super ALFD and many more. In 1992, the company has supplied 500 trucks to the defence. Over the years it has built up a wide product portfolio covering regular as well as niche segment needs. The company exports its products to various countries like Bangladesh, Kenya, Tanzania, Nepal, Zambia, Ghana, Ivory Coast, Rwanda, Seychelles Syria and Jordan.”

“SML ISUZU Limited manufactures and sells light commercial vehicles for goods and passenger applications in India, reported its financial results for the quarter ended 30th June, 2015. The first quarter witnesses a healthy increase in overall sales as well as profitability of the company. The company’s net profit jumps to Rs.29 Cr  against Rs.23 Cr in the corresponding quarter ending of previous year, an increase of 26%. Revenue for the quarter rose 13% to Rs.381Cr from Rs.336Cr, when compared with the prior year period. Reported earnings per share of the company stood at Rs.20 a share during the quarter, registering 25% increase over previous year period. Profit before interest, depreciation and tax is Rs 35 CR as against Rs.26 Cr in the corresponding period of the previous year.”

“At the current market price of Rs 1140, the stock P/E ratio is at 38.82 x FY15E. Net Sales and PAT of the company are expected to grow at a CAGR of 25% and 16% over 2015 to 2016E respectively. 

 We expect that the company surplus scenario is likely to continue for the next three years, will keep its growth story in the coming quarters also. 

We recommend ‘BUY’ in this particular scrip with a target price of Rs 1721 for medium to long term investment

Disclaimer:I am neither a Research analyst nor an Investment Adviser as Per SEBI Guidelines. The information about the stock ideas in this blog are my personal opinions as an experienced investor and are only meant for educating the readers. Readers should always consult their financial/investment advisors before investing in any stock idea given in this blog. I am not responsible for any loss arising out of any information, post or opinion appearing on this blog.It may automatically be assumed that I have a vested interest in the stock idea being projected in my blog.BEFORE ACTING ON ANY OLD RECOMMENDATIONS, PLEASE ENSURE ITS RELEVANCE IN CURRENT CIRCUMSTANCES.

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Torrent Pharma - Best bet for the Medium Term

Torrent Pharmaceuticals Ltd. is the flagship company of the Torrent Group. Based in Ahmedabad, it was promoted by U. N. Mehta initially as Trinity Laboratories Ltd. and was later renamed to its current name Torrent Pharmaceuticals Ltd.

Torrent Pharmaceuticals operates in more than 50 countries with over 1000 product registrations globally.

Moreover, it has 7 fully owned subsidiares:

Heumann Pharma GmbH & Co Generica KG,
Torrent Pharma GmbH,
Torrent do Brasil Ltda.,
ZAO Torrent Pharma,
Torrent Pharma Inc.,
Torrent Pharma Philippines Inc.,
Torrent Pharma Canada Inc.,

Torrent Pharmaceuticals acquired Heumann GmbH, a Pfizer group company in 2005.
Operations

The company's key areas are Formulations, API, Drug Discovery, Marketing and Sales of Drugs. Its operations locations are:
Manufacturing plant at Chhatral, Near Kadi, in North of
Manufacturing plant at Indrad, Mehesna, Gujarat
Manufacturing plant at Baddi,
Manufacturing plant at
Manufacturing plant at Dahej, Gujarat (under progress)
Research Centre, Ahmedabad-Gandhinagar region, GujaratCorporate Office, beside sales India, off Ashram Road, [Ahmedabad]- Gujarat

Exports business remains in sweet spot

The exports business (~65% of the total turnover) is witnessing strong traction, especially from the US even as Brazil is slowing down due to structural issues. Other export markets such as Europe and RoW are growing at a steady pace. In the US, the company owns a healthy product pipeline (70 filed ANDAs, 48 approvals and 38 launches). We expect US sales to grow at a CAGR of 20% in FY14-16E to | 1125 crore. Similarly RoW and European sales are likely to grow at a CAGR of 18% and 13% to | 528 crore and | 1181 crore, respectively, during FY14-16E.

Indian formulations growth steady


Despite having a higher proportion of chronic therapies (65%) the company remains an underachiever in the branded formulations space, growing at a CAGR of 13% in FY09-14. The acquisition of Elder Pharma’s branded portfolio is likely to add new therapies such as neutraceuticals and gynaecology and to fill the portfolio gaps. We expect Indian branded formulations to grow at a CAGR of 27% in FY14-16E to | 1904 crore.


Conclusion

Going ahead, the new filings and approvals in the US will be keenly watched for multiple upgradation. The company, however, keeps on working on other important aspects such as improvements on the cost front via savings in selling and other expenses and Q1 numbers were testimony to this. the margins were healthy. We have also witnessed a turnaround in Brazil and this seems sustainable. In India, consolidation of Elder’s portfolio and growth from its own legacy products is likely to sustain growth momentum. The company remains well poised to deliver well rounded growth with geographies such as the US, EU and RoW joining traditional growth geographies such as India and Brazil.


CMP around Rs.1600


We have maintained a target price of | 2045 in the medium Term

Disclaimer:I am neither a Research analyst nor an Investment Adviser as Per SEBI Guidelines. The information about the stock ideas in this blog are my personal opinions as an experienced investor and are only meant for educating the readers. Readers should always consult their financial/investment advisors before investing in any stock idea given in this blog. I am not responsible for any loss arising out of any information, post or opinion appearing on this blog.It may automatically be assumed that I have a vested interest in the stock idea being projected in my blog.BEFORE ACTING ON ANY OLD RECOMMENDATIONS, PLEASE ENSURE ITS RELEVANCE IN CURRENT CIRCUMSTANCES.

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Medium term pick - Lincoln Pharmaceuticals Ltd

COMPANY PROFILE

Lincoln Pharmaceuticals Limited manufactures, markets, and exports pharmaceutical products in India and internationally. The company’s product categories include antimalarial, antibiotics, anti-bacterial, analgesics, anti-inflammatory, anti-pyretic, anti-hypertensive, anti-fungal, antacids, anti-ulcers, anthelmintic, anti-cold, anti-allergic, anti-asthmatics, anti-emetics, gastrointestinal-agents, anti-diarrhoeals, anti-spasmodic, and pro-biotic, as well as cardiac and diuretic products. It also provides creams, ointments, anti-infective, vitamins, minerals, and iron-preparations.

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Medium term pick - Srikalahasthi Pipes - Mint in tonnes

Lanco industries was incorporated in the year 1991. It has two main products - pig iron and slag cement. Commercial production at the pig iron plant in Tirupathi started in Sept. 1994.

Capacity utilisation is 95.4% of rated capacity for 1996-97. The company's captive power plant was commissioned in Feb 1995. For the year 1996-97, the company produced 24.8 MW internally which was 88% of its total consumption.

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