Tuesday, December 22, 2009

US Healthcare Bill passing is keeping Indian Pharma Active


Healthcare bill advancing in U.S senate would keep select indian Pharma stocks active and Indian pharma companies have made a massive a come-back on Dalal Street. The Bombay Stock Exchange’s Healthcare Index has outperformed its benchmark, the BSE Sensex, surging 33 per cent in six months (Sensex up 17 per cent) and 21 per cent in the past three months (Sensex up 8 per cent), indicating that investors have started re-rating pharmaceutical companies.
JUBILANT ORGANOSYS - Buy for solid returns
About JUBILANT ORGANOSYS:-
  • Jubilant Organosys (JOL) is an integrated pharmaceutical industry player, one of the largest Custom Research and Manufacturing Services(CRAMS) and Drug Discovery and Development Services (DDDS) companies out of India.
  • The Company has successfully positioned itself as a preferred outsourcing partner for leading global pharma & life sciences companies and has the capability to deliver products and services across the pharma value chain.
  • Jubilant has geographically diversified manufacturing facilities at ten locations worldwide. Together, these help the Company cater to over 150 customers across 50 countries.
  • It encompasses products and services across the pharmaceutical value chain such as Advance Intermediates, Custom Synthesis (Kilo to ton quantities), Proprietary products (150 products for more than 229 API and 17 Agrochemicals), Active Pharmaceutical Ingredients, Contract manufacturing of sterile injectables (liquids and lyophilized), non-steriles (ointments, creams and liquid), Specialty pharmaceuticals such as radiopharmaceuticals & allergenic products and manufacturing of generic dosage forms.
  • Jubilant employs over 6000 people across the globe including 1500 people outside India. The Company has offices in USA, Canada, Europe, China and Japan besides India with international subsidiaries in USA, Canada and Belgium.
  • From being a specialty chemicals company, JOL has graduated to being an integrated life sciences company. JOL is the largest and lowest-cost manufacturer of pyridine in the world, and it contributes more than 50% of revenue of the CRAMS business.
  • Post two acquisitions, JOL’s custom manufacturing operations (CMO) have a strong edge in the niche sterile injectables space. JOL already services six of the world’s top ten pharma MNCs.
  • Momentum in the specialty Pharma business is helped by the launch of Sestamibi (generic cardiolite) in the US.
  • With utilization at just 60% of current capacity in CMO, we believe there is scope for leverage as new contracts are signed and existing ones ramp-up
  • JOL is guiding FY10 EBITDA of $190 million, 15% above the consensus. Conversion of ‘10 FCCBs or an announcement of the divestment of the polymer business may be additional catalysts in the coming quarters.
The stock is looking very good on charts and may perform even in dull market conditions. Currently the stock is attractively trading at Rs 341 and one can accumulate for targets above Rs 400.




BSE Pharma Index at Yearly Highs



A DOSE OF GROWTH

Net sales
Net profit
FY2009
FY10E
FY11E 
FY2009
FY10E
FY11E 
Aurobindo Pharma
3077.30
3890.80
4458.55
100.26
489.85
616.45
Cadila Healthcare
2862.40
3522.27
4197.93
303.08
418.10
521.93
Cipla
4960.60
5831.04
6659.96
771.02
1069.68
1,230.08
Dishman  Pharma
1062.36
1128.40
1342.83
146.19
148.87
195.70
Divi's Labs
1180.34
1223.00
1403.00
416.64
397.10
483.30
Dr Reddy’s Labs
6900.63
7243.98
8163.03
-917.24
823.55
1,017.65
GSK Pharma
1699.02
1883.10
2102.45
576.57
591.09
606.55
Glenmark Pharma
2093.02
2485.13
2832.77
193.47
307.87
549.53
Jubilant Organosys
3517.98
4031.10
4617.40
283.18
480.05
513.25
Lupin
3,775.88
4,756.03
5,722.93
501.54
638.73
814.60
Orchid Chemicals
1,260.03
1,833.00
1,913.00
-48.99
69.60
153.70
Piramal Healthcare
3,281.10
3,732.33
4,282.47
316.25
464.20
596.90
Plethico Pharma
969.89
1,323.00
1,576.70
123.35
223.50
286.10
Ranbaxy Labs
7,241.41
6,999.57
8,767.57
-951.2
118.70
1,093.60
Sun Pharma
4,272.30
3,829.60
4,377.88
1,817.73
894.84
1,078.85
Torrent Pharma
1,586.52
1,863.23
2,130.78
184.37
235.75
291.25
FY10 & FY11 estimates based on analyst reports from Angel Broking, Centrum Broking, Citigroup, CLSA,
DSP Merrill Lynch, Edelweiss Research, HDFC Securities, Kotak Securities and Morgan Stanley 
For GSK Pharma, Plethico Pharma and Ranbaxy Labs, estimates are for the year ending December 2009, 2010 and 2011; for others, year ending March 2010 and 2011

http://money.outlookindia.com/article.aspx?87292 Pharma stocks are soaring high on the bourses, but don’t hop on blind: many duds too are aloft on the hot air of hype.
Avoid the small-timers. Bringing up the rear, often touted as low-priced bargains with the potential to generate extraordinary returns, are the tiny-to-small companies. These little known and under-researched companies, more often than not, end up destroying the wealth of thousands of small investors. These are usually the last to join the rally, riding piggyback on the greats.
Typically, such companies manufacture bulk drugs (a low-margin, commodity business) in small factories and have virtually no brand or R&D strengths. The only possible upside in most of these occurs when a larger player decides to acquire them. So tread with caution. Be sure to take the right dose at the right time.
Value Buy - EMCO http://tanmaygopal.blogspot.com/2009/12/emco-ltd-httpwww.html
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