Beximco Pharma Valuation

7/27/2019 Beximco Pharma Valuation

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About UsSL. NAME ID

01 Mohammad Rabin Islam 16-013

02 Md. Atiar Rahman 16-14103 Md. Sanowar Hossain 16-175

04 Md. Azizul Islam 16-260

05 Ariful Hossain 16-262

06 Md. Mahbubur Rahman Khan 16-263


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Our Agenda Company History Overview

Strategic Analysis

Industry AnalysisWACC and Share Price

Ratio Analysis

Conclusion


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Year of Establishment :: 1976 Country of Incorporation :: Bangladesh

Commercial Production :: 1980

Status :: Public LimitedAuthorized Capital (Taka) :: 9,100 million

Paid-up Capital (Taka) :: 3,046.3 million

Number of Shareholders :: Around 89,000

Main Country of operation :: Bangladesh

Number of Employees :: 2,670

Company Overview:


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Corporate Governance: The Company has a three-tier management structure,

comprising the Board of Directors, the Executive

Committee and the Management Committee. There isalso an Audit Committee, constituted in 2006.

Board Details

1.Executive Committee2.Management Committee

3.Audit Committee


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Now Presenting..

Mohammad Rabin Islam 16-013


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Strategic Analysis

Generally the companies use StrategicAnalysis as a basis for their businessstrategy.

Beximco Pharma follows costleadership approach as Beximco

Pharmas main focus is on costreduction in every activity in the valuechain.

Beximco Pharma has differentiateditself by offering generic drugs at the

most affordable price.


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Industry AnalysisCompetitive force: 1 Rivalry among existing firms

price engages the firms in wars in the industry

Beximco fights against the Square pharma then there

are no destructive price competitions among them By considering Switching Cost the company has been

able to differentiate the products in the market

Beximco pharmaceutical Ltd. has able to fulfill thehuge customer demands and also earn abnormal profit

So there is a good advantage for the company to cutprices to fill capacity


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Industry Analysis ContdCompetitive Force 2: Threat of New Entrants

Beximco Pharmaceuticals Ltd is earning abnormal

profit. As we know the potential for earning abnormalprofit attracting new entrants to an industry. BeximcoPharmaceuticals Ltd has already established in themarket by maintaining:

Economy of Scale First Mover Advantage

Access to channels of distribution andrelationships


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Md. Atiar Rahman 16-141

Now Presenting..


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Industry Analysis ContdCompetitive Force 3: Threat of Substitute Product Relevant substitutes are not necessary for those that

have the same form as the existing products, but thosethat perform the same function.

For example, Beximco Pharma produces differentproducts. Napa is one of them for reducing the fever. Onthe other hand Square pharmaceuticals also produceACE for reducing the fever. But the price of this product

is almost same of these companies. So, customer buyssometimes NAPA and sometimes ACE.

Its a threat for the Beximco Pharmaceuticals Ltd.Having the reputation and goodwill of the company isleading position among the pharmaceutical companies.


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Industry Analysis Contd

Competitive Force 4: Bargaining Power of Buyers Price Sensitivity: Buyers are more prices sensitive when the

product is undifferentiated but in the Beximco pharma thereis no undifferentiated products. When the products areundifferentiated there is low switching cost here. Beximco

pharma has so many products such as Napa Extra,Oseltamivir,Decomit, Nitrosol, Bexi gold,Dexiten,Atrizin,NapaDT,Ras,Saritene,Nitaxide, Q-Respria 1, 2 etc all products Priceare fixed. We know that in the field of medicine site buyer feelreluctant to bargain.

Relative Bargaining Power: Having the fixed Price ofBeximco Parmas product so the buyers in the market have noability to bargain. They feel interest to buy on the showing

price.


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Industry Analysis Contd

Competitive Force 5: Bargaining Power ofSuppliers Beximco Pharmaceuticals Ltd as supplier has a strong

bargains power in Pharmaceuticals Ltd companies.

Because we have some unique features thus make usunique. We have IV fluid manufacturing plant, MDIplant and Oral solid dosage (OSD) plant.

Beximco Pharmaceuticals Ltd have supported byownsbackward and forward integration. Because Beximcopharma have a own paper printing machine and plasticmachine. The cover of the medicine is made by theBeximco plastic industries LTD. So it was backward

integration ofBeximco pharma.


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Now Presenting..

Md. Mahbubur Rahman Khan 16-263


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WACC and Share Price Contd

Enterprise value 37,796,087,803.52

Cash 518,768,296Interest-bearing debt 3,896,034,840Equity value 34,418,821,259.52

Value per share 136.71

Current Forecast Price is Tk.136.71 and Current Market Price is Tk.56.71So, The Share Price of Beximco Pharma is Undervalued by Tk.80


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Ariful Hossain 16-262

Now Presenting..


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Ratio AnalysisInvestment Valuation Ratios:

Dividend per share =goutstandinsharesofNumber

dividend

Interpretation: Only in the year 2008 the Dividend Per Sharewas the highest because of the high (30%) dividend in that year.Then, although Dividend Per Share dropped in the next year

(15%), it was increasing from year 2009 to 2011.


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Ratio Analysis ContdProfitability Ratios:

Net Profit Margin(%) =Revenue

incomeNet

Interpretation: There is a steady growth in the net profitmargin as the companys Net Income and Sales Revenue are

increasing gracefully every year.


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Now Presenting..

Md. Azizul Islam 16-260


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Ratio Analysis ContdLiquidity And Solvency Ratios:

Current Ratio =sLiabilitieCurrent

setsCurrent As

Interpretation: From 2008 the current ratios were decreased but in 2009 it wasincreased .Because the current assets were decreased in 2008 and 2010 and liabilities

were increased so that the current ratios were decreased. But in 2009 and 2011 the ratioswere increased due to the increasing in current asset. So increasing in current assets

help to meet up the current liabilities.


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Ratio Analysis Contd

Management Efficiency Ratios:

Working capital turnover =capitalworkingAverage

Revenue

Interpretation: It shows how effectively a company is using its working capital togenerate sales. In this case Beximco Pharmas Working Capital Turnover is increasinggently over the five years indicating that it is quite efficient in manipulating its Working

Capital to generate Revenue.


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Conclusion Beximco Pharmaceuticals Ltd (BPL) is a leading

manufacturer of pharmaceutical formulations and ActivePharmaceutical Ingredients (APIs) in Bangladesh.

The company is consistently building upon its portfolio andcurrently producing more than 400 products in differentdosage

With decades of contract manufacturing experience with

global MNCs, skilled manpower and proven formulationcapabilities, the company has been building a visible andgrowing presence across the continents offering high return


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Beximco Pharma Valuation

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