Marksans Pharma Research Report
19
Transcript of Marksans Pharma Research Report
Page 2 Source: Company, www.dynamiclevels.com
Marksans Pharma
Health Care in Safe Hands
Company Overview and Stock price ……………………………………….……3
Product Overview……………………………………………………………….….…..4
Marksans Goa Plant…………………………………………………………………...7
Marksans R&D……………………………..…………………………………………...8
Industry Outlook………………………………………………………………………10
Company Financial….……………….…………….……………………….….……13
Balance Sheet…………………………………………..………….………….….…….14
Cash Flow……………..………………………………..…………….…………………15
Key Ratios....……………………………………………………………………………15
Peer Comparison…………….…………………………………………….……..…..16
Shareholding Pattern…………………………………………..……………....…. 18
Investment Rationale………………………………………...………….......…....19
Disclaimer………………………………………………………………………………20
Buy Price: Rs 49 Target: 70 FY16P/E: 42
Page 3 Source: Company, www.dynamiclevels.com
Company’s Overview and Stock Price
Marksans Pahrman focus lies in the OTC & prescription drugs that have wide-
ranging applications across fields like
Oncology
Gastroenterology
Antidiabetic, Antibiotics
Cardiovascular
Pain Management
Gynaecology
Marksans R&D capabilities include dossier development, chemical synthesis,
process optimization, formulation development, analytical development and
conducting stability studies. The company has a team of over 50 experienced
scientists specializing in formulation development and analytical development.
The conpany has possessed end-to-end capabilities – from Lab scale
development to Pilot scale up and from commercializing the product for large
scale manufacturing to marketing globally.
The company has achieved global recognition within a very short span of time
and has major global expansion plans for the near future.
EXCHANGE SYMBOL MARKSANS
Sector PHARMA
Current Price * (Rs.) 53.75
Face Value (Rs.) 1
52 Week High (Rs.) 113.90 (28-Dec-
15)
52 Week Low (Rs.) 33.50 (01-Mar-16)
Life Time high (Rs.) 115.00 (10-Aug-
15)
Life Time low (Rs.) 0.87 (28-May-03)
Average Daily Movement 3.25
Average Volume [20 days] 5506566
1 Month Return (%) 31.7
Consolidated Trailing PE
Ratio
45.77
Book Value 10.79
Market Cap 2202.11 (Cr)
% of Promoter holding
pledged
0
The table is showing NSE Index performance sorted on 1 Month
percentage change
# Symbol 1Month% 3Months% 6Months% 1Year
%
1 NIFTY AUTO INDEX 4.32 15.68 27.16 32.27
2 NIFTY PHARMA INDEX
3.47 6.25 10.43 -7.26
3 NIFTY MEDIA INDEX 2.95 16.68 31.68 27.46
4 NIFTY FINANCE INDEX
2.41 12.18 25.64 14.97
5 BANK NIFTY 2.27 11.10 25.45 13.73
6 NIFTY ENERGY INDEX
2.23 13.87 18.02 31.30
7 NIFTY REALTY INDEX 1.72 7.34 40.01 19.71
8 NIFTY 1.60 6.60 15.11 11.50
9 NIFTY METAL INDEX -0.03 20.39 38.63 60.64
10 NIFTY IT INDEX -0.24 -6.30 -6.79 -12.67
11 NIFTY FMCG INDEX -1.24 2.41 13.12 12.55
Pharma index has underperformed in 3 months, 6 months and 1 year. But
started performing from last 1 month and has become 2nd Top performing
Index.
This is a weekly chart of Marksans Pharma
showing the stock has gain momentum from
40 levels and giving breakout of 53 levels.
Page 4 Source: Company, www.dynamiclevels.com
Product overview
Marksans Pharma has established world-class formulation
manufacturing facilities by leveraging state-of-the-art technology,
incorporating best practices and adhering to stringent regulatory
compliances. These are Centers of Excellence committed to
creating the highest quality products.
The company has highly sophisticated manufacturing plant in Goa
is spread over a sprawling 18,000 sq. m. It is home to cutting-
edge product innovation and formulation development processes
that cater to global needs.
Manufacturing facility at Goa has advanced infrastructure and
automated manufacturing and packaging lines that are specially
designed to meet global statutory requirements.
The plant is approved by regulatory bodies such as:
U S Food and Drug Administration (US FDA)
Therapeutic Goods Administration (TGA)
Medicines and Healthcare products Regulatory Agency
(MHRA) - United Kingdom
Marksans have a WHO GMP certificates
The company manufactures a wide range of solid oral dosage in
the form of:
Tablets (plain, enteric coated and film coated)
Hard Gelatin Capsule
Soft Gelatin Capsules
Market: Unites States (US)
The US pharmaceutical market is one of the key focus areas for
Marksans Pharma. The company has achieved the required
approvals from the US FDA and has actively started exporting
formulation to US.
The company’s target is the technology driven niche liquid gel
market which is tapped by select players, thus providing
differentiation. Marksans offers innovative product offerings
through exclusive tie-ups, supply and marketing arrangements.
Marksans has focused towards
formulation development and have a
strong back up in terms of R&D and
aggressive marketing plans.
The US pharmaceutical
market is one of the key
focus areas for
Marksans Pharma.
Marksans Pharma has
highly sophisticated
manufacturing plant in
Goa is spread over a
sprawling 18,000 sq.
m.
Page 5 Source: Company, www.dynamiclevels.com
Europe
Led by Marksan’s subsidiaries Bell, Sons & Co (Druggists) Ltd. and
Relonchem Ltd., Marksans Pharma Ltd. has established a strong
foothold in the European markets. They have a strong presence in the
OTC and formulations space and continue to leverage their strengths in
manufacturing and distribution.
Marksans Pharma is engaged in supply of pharmaceutical products to
clients such as Boots, Almus, Actavis, Teva, Genepharma and Mylan.
In addition, they also assist requirements such as Dossier development,
Filing and Commercial Supply to European Customers.
South East Asia
Marksans started operations in the Asian region in 2008. The vast and
diverse Asian continent has been the focal point of Marksans
international operations. With 300+ product registrations covering 9
countries, Marksans has a vantage position in the Asian region.
Backed by a strong product portfolio and a highly promising pipeline of
pending product registrations, Marksans is well positioned to realize the
true potential of these markets. Their aim is to reach out to different
territories in the world’s largest continent by offering pharmaceutical
products encompassing a wide range of therapeutic indications with
impeccable quality at par with international standards.
Africa The African market presents extensive opportunities for Marksans’s
international operations. With 40 product registrations, Marksans is
consolidating its position in the African region. The company has a
strong product portfolio for these markets are has plans for offering a
comprehensive array of products in the near future.
The company aspires to gain a strong foothold in this region by offering
high quality and value-based pharmaceutical products, which are at par
with international standards.
Russia & CIS
Marksans Pharma Ltd
product list contains 79
products in Europe
Marksans Pharma has 300+
products registrations covering
9 countries with advantage
position in the Asian region
Key Brands In Africa
Clavmark
Furomark
Ampimark
Amoxmark
Leximark
Page 6 Source: Company, www.dynamiclevels.com
Marksans Pharma is currently exporting its products to CIS and Russia.
Their focus is to leverage their strengths in research, IP and
manufacturing to build strategic alliances and to increase presence and
participation in these markets.
The Company remains committed to growing their presence in these
markets by delivering high quality products at affordable prices and
constantly upgrading their offerings. In addition, introduction of newer
products in existing markets and entry in new territories will impel their
growth in these markets.
Latin America
Marksans aims to penetrate the Latin American market with its high
quality products and extensive product portfolio. Strong economic
performance in this region is expected to fuel growth in the coming
years. In addition, recent regulatory developments will create further
market opportunities in the country, particularly for generic producers
in both the private and public sectors.
In Ecuador, the pharmaceutical industry is expected to perform well in
the coming years, with strong growth in production, sales, exports and
employment. Pharmaceutical companies, however, are encouraged to
act in smaller Latin American markets to maximize their full regional
sales potential.
Generics consumption in Latin America is high. Marksans Pharma is
currently operating in Central America, South America & Caribbean
Islands with 15 products registered and 70 products are submitted to
MOH (Ministry of Health).
Australasia
Marksans has gained a foothold in the prestigious Australasia markets
through its acquisition of Nova Pharmaceuticals Australasia Pty Ltd. in
2005. They are now a prominent distributor to popular retail brands in
the region.
Through Nova, Marksans now holds 30 MAs and has become one of the
biggest suppliers of generic products here. They continue to grow
rapidly and expand into key therapeutic classes. They are leveraging
this opportunity and reaching out to the New Zealand pharmaceutical
market as well.
Areas of Operations
Russia
Ukraine
Kazakhstan
Georgia
Moldova
Areas of Operations
Ecuador
Jamaica
Nicaragua
Central America
South America
Caribbean Islands
Areas of Operations
Analgesics
Anti allergy
Antibacterial
Antibiotic
Antiulceratives
Hypertension
Page 7 Source: Company, www.dynamiclevels.com
About Marksans Goa Plant
Marksans Pharma’s premier manufacturing and R&D facility is located
at Goa, India. The formulation plant here is spread across an 18,000
square feet campus. The plant is a 100% EOU has been designed to
accommodate rapid future expansion.
The entire facility has been built to adhere to the US FDA guidelines
and has been approved by various international bodies such as US FDA,
UK MHRA, Australian TGA and ANVISA (Brazil). The facility houses
a pilot manufacturing plant and has also received recognition from the
Department of Scientific and Industrial Research (DISR).
This facility is one of the biggest manufacturing facilities for soft
gelatin capsules and tablets in Asia.
The plant has fully automated packaging capabilities. In addition, the
plant also has an R&D centre that comprises of three key divisions for
formulation development, devising analytical methods and conducting
stability studies.
Marksans Pharma has another manufacturing facility at a multi-purpose
UK MHRA licensed factory in Southport, UK. This setup is primarily
engaged in manufacturing non-sterile liquids, ointments and powder
products.
The company’s production lines have the following manufacturing
capacities and capabilities:
Oral liquids in batches up to 8000liters
Non-oral liquids up to 3000liters
Blended powders up to 800kilograms
Ointments up to 400kilograms
Liquid packaging - from 5ml up to 5liters (bottles)
Ointments and powders packaging – 5g to 5kg
(containers)
Powder filling – 5g to 20g (sachets)
In addition, they also have a fully-staffed development laboratory and
have the capability to develop and improve formulations. Their
Regulatory Department provides the necessary in-house support with
respect to regulatory affairs, license variations and applications.
Page 8 Source: Company, www.dynamiclevels.com
Marksans R&D
THE CONTRACT RESEARCH AND MANUFACTURING
SERVICES (CRAMS)
Marksans have completely integrated R&D, technology and engineering
capabilities that enable us to be cost effective partners on a sustainable basis.
They have built strong alliances and continuing relationships with top global
generic companies to offer R&D and formulation development services.
The Contract Manufacturing Division is being set up to address the challenges
and opportunities created due to increasing R&D costs, low R&D productivity,
impending patent expirations and at the same time, pressure to reduce
healthcare costs. This in turn has propelled global pharma majors to cut costs
and improve overall profitability. This is expected to translate into a strong
outsourcing potential for low cost manufacturing destinations like India.
INDIA OFFERS THE FOLLOWING ADVANTAGES TO
INNOVATOR COMPANIES
Strong chemistry skills as demonstrated in the domestic market
Low labour cost (1/7th ) compare to that in USA
Lower cost of manufacturing (30-40%) as compared to western
countries with same quality
Integrated business model creating a 'one stop' shop for
innovators
India has six times the number of trained chemists as the US,
which are available at 1/10th of the cost
India has over 75 USFDA approved plants (the highest no. of
FDA approved plants outside the US)
Abundant English speaking skilled manpower
High quality telecom and IT infrastructure
Indian companies have better regulatory skills like IPR
adherence
WHY MARKSANS PHARMA CRAMS?
Marksans Pharma has alliances with the top MNC generic
companies for contract manufacturing of 30 generic products
for the European markets
The Compnay have long-term (7-10
years) licensing agreements with
several companies for development
and supply of products
Global presence
Low cost manufacturing base
World class manufacturing
capacities/ plant, huge capacities
Approvals from Global Health
Authorities like US FDA, UK
MHRA, Australia TGA
Strong R&D and dossier
development capabilities
More than 125 plus product IP – for
regulated markets
More than 500 plus product IP’s – in
semi-regulated markets
Only company in India having
USFDA/ TGA/ MHRA approval for
softgel products
Among the very few companies in
India offering CRAMS for US/
global markets into formulation
development and manufacturing
STRATEGY
The company plans to enhance its
product portfolio with the addition of
12-13 products every year
Offering CRAMS for existing and
emerging markets is envisaged as one
of the major driver and revenue
earner for the company
Page 9 Source: Company, www.dynamiclevels.com
Out Licencing
Marksans is committed to developing new drugs and has
embarked on forging out-licensing agreements with other global
pharmaceutical majors.
They are actively seeking out-licensing arrangements and
strategic partnerships with international specialty pharmaceutical
companies focused on the marketing of generic pharmaceuticals
to enter new segments and grow in these markets.
OUT-LICENSING IN INDIA
Out-licensing is a relatively new phenomenon in the Indian
pharmaceutical sector. Very few Indian companies have the
required in-house facilities to develop patented products.
An out-licensing strategy can make a critical drug globally
accessible, and technology collaboration can enable an
experimental drug to make it to the market quicker. This is also
significant in the global pharmaceutical sector, as development of
new drugs and out-licensing allows their partner’s access to a
diverse selection of the most sought after drugs and research
compounds.
WHY MARKSANS FOR OUT-LICENSING?
Marksans has state-of-the-art research facilities, equipped with the
latest infrastructure, which are led by highly qualified scientists
from institutions having international recognition. This facilitates
us to develop new generation drugs, formulations and novel drug
delivery vehicles, as per international standards and regulations.
Page 10 Source: Company, www.dynamiclevels.com
Industry Outlook
REASONS TO INVEST
India is expected to rank amongst the top three pharmaceutical
markets in terms of incremental growth by 2020.
India will become the sixth largest market globally in terms of
absolute size by zero.
India’s generic drugs account for 20% of global exports in
terms of volume, making the country the largest provider of
generic medicines globally.
India’s cost of production is significantly lower than that of the
USA and almost half of that of Europe.
A skilled workforce as well as high managerial and technical
competence.
Economic prosperity is likely to improve affordability for
generic drugs in the market.
Approval time for new facilities has been drastically reduced.
STATISTICS
The country’s pharmaceuticals industry is expected to account
for about 3.1-3.6% of the global pharma industry by value and
currently accounts for 10% by volume, by 2016.
Industry revenues are expected to expand at a CAGR of 12.1%
during 2012-20 and reach USD 45 Billion.
The healthcare sector in India is expected to grow to USD 250
Billion by 2020 from USD 65 Billion currently.
The generics market is expected to grow to USD 26.1 Billion by
2016 from USD 11.3 Billion in 2011.
GROWTH DRIVERS
Between 2011 and 2016, patent drugs worth USD 255 Billion
are estimated to go off-patent leading to a huge surge in generic
product and tremendous opportunities for companies.
By 2020, it will grow to USD 11 billion - a CAGR of 18%, with
the potential to reach USD 13 billion - at an aggresive CAGR of
20%.
With increasing penetration of chemists, especially in rural
India, OTC drugs will be readily available.
Pharma companies have increased spending to tap rural markets
and develop better infrastructure. The market share of hospitals
is expected to increase from 13.1% in 2009 to 26% in 2020.
Following the introduction of product
patents, several multinational
companies are expected to launch
patented drugs in India.
The purported rise of lifestyle
diseases in India is expected to boost
industry sales figures.
Over USD 200 Billion is to be spent
on medical infrastructure in the next
decade.
Rising levels of education are set to
increase the acceptability of
pharmaceuticals.
India’s patient pool is expected to
increase to over 20% in the next 10
years, mainly due to the rise in
population.
FDI POLICY
100% Foreign Direct Investment
(FDI) is allowed under the automatic
route for Greenfield projects.
For brownfield project investments,
up to 100% FDI is permitted under
the government route.
The government may incorporate
appropriate conditions for FDI in
brownfield cases, at the time of
granting approvals.
‘Non-compete’ clauses are not
allowed except in special
circumstances, with the approval of
the Foreign Investment Promotion
Board.
The FDI is subject to applicable
regulations and laws.
Page 11 Source: Company, www.dynamiclevels.com
SECTOR POLICY
The National Pharmaceutical Pricing Policy, 2012 (NPPP-2012)
has been notified on December 7, 2012.
The salient features of the NPPP-2O12 are as under:
The regulation of prices of drugs on the basis of the
essentiality of drugs as specified under the National List
of Essential Medicines (NLEM)- 2011.
The regulation of prices of drugs on the basis of
regulating the prices of formulations only.
The regulation of prices of drugs on the basis of fixing the
ceiling price of formulations through Market Based
Pricing.
The provision of exemptions to drugs manufactured
through indigenous R&D from price control for five
years.
A Drug Price Control Order 2013 has been notified in
May 2013 to implement the provisions of NPPP-2012.
FINANCIAL SUPPORT
KEY PROVISIONS IN THE 2O15-16 UNION BUDGET:
The threshold limit for applicability of transfer pricing
regulations to specified domestic transactions increased
from INR 0.05 billion to INR 0.2 Billion.
Service Tax exemption for common effluent treatment
plant operators.
Rate of income tax on royalty and fees for technical
services reduced from 25% to 10% to facilitate
technology inflow.
Time limit for taking CENVAT credit on inputs and input
services have been increased from six months to one year.
R&D BENEFITS:
Industry/private sponsored research programmes:
A weighted tax deduction is given under section 35
(2AA) of the Income Tax Act.
A weighted deduction of 200% is granted to assess for
any sum paid to a national laboratory, university or
institute of technology, or specified persons with a
specific direction provided that the said sum is used for
scientific research within a programme approved by the
prescribed authority.
Companies engaged in manufacture having
an in-house R&D centre:
Weighted tax deduction of 200% under
section 35 (2AB) of the Income Tax Act for
both capital and revenue expenditure
incurred on scientific research and
development. Expenditure on land and
buildings are not eligible for deduction.
A national centre to help develop bulk
drugs and facilitate their research is being
set up in Hyderabad.
Duty free import of Pharmaceuticals
reference standards.
INVESTMENT OPPORTUNITIES
India is expected to be the third largest
global market for active pharmaceutical
ingredients by 2016, with a 7.2% increase
in market share.
Indian pharma companies registered 49%
of overall DMF filed in the US in 2012.
The Contract Research and Manufacturing
Services industry – estimated at USD 8
Billion in 2015, up from USD 3.8 Billion in
2012. The market has more than 1000
players.
The formulations industry – India is the
largest exporter of formulations with 14%
market share and ranks 12th in the world in
terms of export value. Double-digit growth
is expected over the next five years.
FOREIGN INVESTORS
Teva Pharmaceuticals (Israel)
Nipro Corporation (Japan)
Procter & Gamble (USA)
Pfizer (USA)
Glaxo Smith Kline (UK)
Johnson & Johnson (USA)
Otsuka Pharmaceutical (Japan)
AstraZeneca (Sweden-UK)
Page 12 Source: Company, www.dynamiclevels.com
Company Financials
Balance sheet
Jun-16 Mar-16 Dec-15 Sep-15 Jun-15 Mar-16
Quarterly Quarterly Quarterly Quarterly Quarterly Annual
Net Sales/Income from operations 186.75 210.23 217.41 255.53 210.16 893.33
Other Operating Income
0.01 6.45 0.10 0.01 2.30 8.87
Total Income From Operations 186.76 216.68 217.51 255.54 212.46 902.19
Increase/Decrease in Stocks -16.50 1.59 1.99 3.03 -1.77 4.84
Consumption of Raw Materials 91.32 96.40 75.20 96.70 72.97 341.27
Purchase of Traded Goods 34.97 46.78 33.89 36.58 46.33 163.58
Employees Cost 38.26 31.11 36.54 36.53 18.24 122.42
Depreciation 4.82 8.36 9.76 5.48 4.52 28.13
Other Expenses
30.44 30.04 39.30 31.33 24.28 124.95
Total Expenditure 183.31 214.28 196.69 209.64 164.58 785.19
Operating Profit 3.45 2.40 20.82 45.90 47.88 117.01
P/L Before Int., Excpt. Items & Tax 3.45 2.40 20.82 45.90 47.88 117.01
Interest 1.28 1.97 2.34 2.87 2.98 10.16
P/L Before Exceptional Items & Tax 2.17 0.43 18.48 43.03 44.90 106.85
P/L Before Tax 2.17 0.43 18.48 43.03 44.90 106.85
Tax 0.30 4.38 -0.17 7.33 12.57 24.11
P/L After Tax from Ordinary Activities 1.87 -3.95 18.66 35.71 32.34 82.74
PAT
1.87 -3.95 18.66 35.71 32.34 82.74
Minority Interest -0.85 -1.81 -0.72 -0.83 -0.87 -4.23
Net Profit/(Loss) For the Period
1.02 -5.76 17.93 34.87 31.47 78.51
Equity Share Capital 40.93 40.93 40.93 40.93 40.93 40.93
Reserves -- 400.89 -- -- -- 400.89
Equity Dividend Rate (%) -- -- -- -- -- --
EPS (Rs.) [After Extraordinary items]
0.05 -- 0.46 0.87 0.79 2.02
Company’s revenue has fallen by 11.16% QoQ from Rs. 210.23 crs to Rs. 186.75 crs.
Company’s total expenditure has gone down drastically from Rs. 214.28 crs to Rs. 183.31 crs almost
14.45%.
Company has lower down its interest outgo.
From loss company has posted positive result. From Rs. -5.76 crs to Rs. 1.02 this can be turnaround
for the company.
Page 13 Source: Company, www.dynamiclevels.com
In Cr. Mar-16 Mar-15 Mar-14 Mar-13 Mar-12
12 mths 12 mths 12 mths 12 mths 12 mths
EQUITIES AND LIABILITIES
SHAREHOLDERS FUNDS
Equity Share Capital 40.93 40.93 38.53 38.53 36.78
Preference Share Capital 12.5 12.5 13.5 13.5 13.5
Total Share Capital 53.43 53.43 52.03 52.03 50.28
Reserves and Surplus 369.27 304.75 107.89 57.95 -239.52
Total Reserves and Surplus 369.27 304.75 107.89 57.95 -239.52
Money Received Against Share Warrants 0 0 0 0 1.16
Total Shareholders Funds 422.7 358.18 159.92 109.98 -188.08
NON-CURRENT LIABILITIES
Long Term Borrowings 0 0 19.82 7.88 15.2
Deferred Tax Liabilities [Net] 0.31 0.5 1.87 2.22 12.59
Total Non-Current Liabilities 0.31 0.5 21.68 10.1 27.79
CURRENT LIABILITIES
Short Term Borrowings 40.62 43.52 58.06 75.31 77.18
Trade Payables 31.41 44.58 40.5 29.86 29.48
Other Current Liabilities 0.68 39.88 73.59 75.05 294.43
Short Term Provisions 38.49 40.45 22.68 9.95 5.12
Total Current Liabilities 111.19 168.43 194.83 190.17 406.22
Total Capital And Liabilities 534.2 527.11 376.43 310.25 245.93
ASSETS
NON-CURRENT ASSETS
Tangible Assets 90.32 77.72 49.39 50.29 48.96
Intangible Assets 7.15 12.29 17.43 22.56 27.7
Fixed Assets 97.47 90.01 66.82 72.85 76.66
Non-Current Investments 231.44 67.62 67.62 67.62 23.51
Long Term Loans And Advances 1.25 0.83 1.5 1.2 3.95
Total Non-Current Assets 330.16 158.45 135.93 141.67 104.12
CURRENT ASSETS
Inventories 43.74 51.03 55.61 51.32 40.25
Trade Receivables 133.41 124.63 112.38 91.42 74.19
Cash And Cash Equivalents 3.13 167.54 33.37 0.41 17.58
Short Term Loans And Advances 23.76 25.46 39.14 25.43 9.78
Total Current Assets 204.04 368.66 240.5 168.57 141.81
Total Assets 534.2 527.11 376.43 310.25 245.93
Page 14 Source: Company, www.dynamiclevels.com
Ratio Analysis
Cash Flow Product Name Mar-16 Mar-15 Mar-14 Mar-13 Mar-12
Net Profit/Loss Before Extraordinary Items And Tax
-29.61 22.42 23.93 107.81 74.94
Net Cash Flow From Operating Activities 74.53 48.34 62.97 106.31 76.26 Net Cash Used In Investing Activities -61.82 -50.22 -225.52 -241.51 -40.14 Net Cash Used From Financing Activities -12.79 -18.37 116.45 187.12 -11.09 Foreign Exchange Gains / Losses 0.00 0.00 0.00 0.00 0.00 Adjustments on Amalgamation / Merger / Demerger / Others
0.00 0.00 0.00 0.00 0.00
Net Inc/Dec In Cash And Cash Equivalents -0.08 -20.26 -46.10 51.93 25.03 Cash And Cash Equivalents Begin of Year 22.50 42.76 88.86 36.93 11.90 Cash And Cash Equivalents End Of Year 22.42 22.50 42.76 88.86 36.93
Company has a positive operating cash flow
Company has made some capital investment in last year
Mar 16 Mar 15 Mar 14 Mar 13 Mar 12
Per Share Ratios
Basic EPS (Rs.) 1.75 1.64 1.44 1.03 -4.92
Diluted EPS (Rs.) 1.75 1.64 1.44 1.03 -4.70
Cash EPS (Rs.) 2.11 1.86 1.67 1.25 -4.43
Book Value [ExclRevalReserve]/Share (Rs.) 10.02 8.45 3.80 2.50 -5.48
Book Value [InclRevalReserve]/Share (Rs.) 10.02 8.45 3.80 2.50 -5.48
Dividend / Share(Rs.) 0.12 0.12 0.10 0.00 0.00
Net Profit/Share (Rs.) 1.75 1.64 1.44 1.03 -4.92
Profitability Ratios
PBDIT Margin (%) 31.43 29.29 27.66 25.19 -74.92
PBIT Margin (%) 27.31 27.07 24.91 20.66 -86.56
PBT Margin (%) 25.58 23.83 20.08 15.39 -118.31
Net Profit Margin (%) 19.96 16.54 17.64 20.58 -117.12
Return on Networth / Equity (%) 17.42 19.41 37.94 41.02 0.00
Return on Capital Employed (%) 16.89 18.70 30.59 32.96 112.96
Return on Assets (%) 13.38 12.73 14.75 12.75 -73.62
Total Debt/Equity (X) 0.10 0.13 0.53 0.86 -0.46
Asset Turnover Ratio (%) 67.04 76.94 83.66 61.98 62.86
Liquidity Ratios
Current Ratio (X) 1.84 2.19 1.23 0.89 0.35
Quick Ratio (X) 1.44 1.89 0.95 0.62 0.25
Inventory Turnover Ratio (X) 8.19 7.95 5.66 3.75 3.84
Dividend Payout Ratio (NP) (%) 8.09 8.62 8.63 0.00 0.00
Dividend Payout Ratio (CP) (%) 6.71 7.60 7.47 0.00 0.00
Valuation Ratios
Enterprise Value (Cr.) 1,941.02 2,411.90 980.81 246.55 148.99
MarketCap/Net Operating Revenue (X) 5.28 6.22 2.93 0.78 0.39
Price/BV (X) 4.61 7.30 6.30 1.56 -0.30
Price/Net Operating Revenue 5.28 6.22 2.93 0.78 0.39
Earnings Yield 0.04 0.03 0.06 0.26
Page 15 Source: Company, www.dynamiclevels.com
Peer Comparison
Peer Comparison on leverage basis
Peer comparison on
Valuation and Investment
Company Name Last Price 52 Wk High 52 Wk Low Net Profit Sales Profit Margin
AJANTA PHARMA 2074.90 2091.00 1101.05 119.55 471.02 25.38%
DISHMAN 237.75 228.00 127.95 45.51 375.40 12.12%
GRANULES 122.80 164.40 101.40 31.87 343.73 9.27%
UNICHEM 271.80 334.10 188.50 25.77 341.97 7.54%
NATCO PHARMA 619.75 702.65 390.00 47.43 325.22 14.58%
JB CHEMICALS 371.95 396.20 228.00 49.86 309.23 16.12%
AARTI DRUGS 638.65 647.90 431.60 19.94 291.88 6.83%
SYNGENE 487.70 523.90 317.45 59.80 274.50 21.79%
FDC 222.60 274.35 165.00 48.97 264.49 18.51%
MERCK 712.00 818.00 620.00 17.90 257.74 6.94%
INDOCO REMEDIES 330.30 362.00 232.90 19.79 257.37 7.69%
HIKAL 205.35 216.35 107.05 10.96 221.23 4.95%
MARKSANS PHARMA 54.85 113.90 33.50 1.87 186.76 1.00%
SHILPA MEDICARE 559.40 612.90 355.00 24.14 154.46 15.63%
NEULAND LAB 1002.40 1080.00 491.00 9.71 149.77 6.48%
SMS PHARMA 106.25 137.15 58.80 9.15 145.85 6.27%
BLISS GVS 148.45 210.50 79.05 27.44 140.14 19.58%
SUVEN 206.30 308.70 144.30 32.58 133.23 24.45%
MOREPEN LAB 26.15 41.75 13.35 4.01 118.44 3.39%
Marksans Pharma has low profit margin in comparison to its peer companies. But company is trying
INSTRUMENT Price Avg. Volume Market Cap (Rs. in Cr) % FII Holding
AJANTA PHARMA 2074.90 157848 18260 9.87
BLISS GVS 148.45 266067 1531 4.25
DISHMAN 237.75 2444623 3837 13.47
FDC 222.60 186156 3959 0.00
GRANULES 122.80 1408629 2666 7.15
HIKAL 205.35 103960 1688 3.94
INDOCO REMEDIES 330.30 139679 3044 12.35
JB CHEMICALS 371.95 301048 3155 4.91
MARKSANS PHARMA 54.85 5889339 2245 0.00
MOREPEN LAB 26.15 2848590 1176 0.00
NATCO PHARMA 619.75 177783 10794 12.75
NEULAND LAB 1002.40 18853 890 2.66
SHILPA MEDICARE 559.40 44833 4313 13.74
SUVEN 206.30 415372 2626 2.01
SYNGENE 487.70 154434 9754 4.52
Marksan has good market liquidity thus entry and exit in the stock is easy.
Page 16 Source: Company, www.dynamiclevels.com
Valuation and Investment
Peer comparison on Profitability
Shareholding Pattern
INSTRUMENT Price % Pledged Debt Equity Ratio (X) Int. Coverage Ratio (X)
AJANTA PHARMA 2074.9 5.04 0.06 122.16 BLISS GVS 148.45 0.00 0.24 9.87 DISHMAN 237.75 0.57 0.58 4.63 FDC 222.60 0.00 0.00 176.21 GRANULES 122.80 26.99 0.63 7.12 HIKAL 205.35 0.00 1.02 2.94 INDOCO REMEDIES 330.3 0.01 0.22 13.87 JB CHEMICALS 371.95 0.00 0.18 27.12 MARKSANS PHARMA 54.85 0.00 0.23 14.29 MOREPEN LAB 26.15 0.39 0.90 5.98 NATCO PHARMA 619.75 0.00 0.08 12.25 NEULAND LAB 1002.4 4.36 0.91 3.36 SHILPA MEDICARE 559.40 0.00 0.29 32.95 SUVEN 206.30 0.00 0.11 21.10 SYNGENE 487.70 0.00 0.85 43.32
Marksan Pharma has low debt to equity ratio, therefore company has good leverage
position.
INSTRUMENT Price P/E Ratio (X) PAT JUN' 16 PAT MAR' 16 PAT DEC' 15 PAT JUN' 15
AJANTA PHARMA 2074.90 42 119.55 106.31 111.30 83.84
BLISS GVS 148.45 24 27.44 13.31 21.37 19.97
DISHMAN 237.75 21 45.51 49.81 46.93 37.76
FDC 222.60 24 48.97 38.25 28.77 43.72
GRANULES 122.80 20 31.87 33.19 27.15 27.15
HIKAL 205.35 34 10.96 22.24 12.41 1.83
INDOCO REMEDIES 330.30 37 19.79 20.01 20.42 20.27
JB CHEMICALS 371.95 16 49.86 43.23 49.89 34.28
MARKSANS PHARMA 54.85 42 1.87 -3.95 18.66 32.34
MOREPEN LAB 26.15 68 4.01 2.77 7.28 2.50
NATCO PHARMA 619.75 62 47.43 60.45 36.67 27.54
NEULAND LAB 1002.40 31 9.71 6.63 6.28 7.30
SHILPA MEDICARE 559.40 41 24.14 38.03 24.88 15.76
SUVEN 206.30 24 32.58 32.29 17.72 20.23
SYNGENE 487.70 41 59.80 66.50 58.80 43.60
Because of low profitabity Marksans is trading at High PE but it will get better with increasing
profitability in future
Page 17 Source: Company, www.dynamiclevels.com
Investment Rationale
Category & Name of the Shareholders No. of shareholder Total no. shares held %Holding
Promoter & Promoter Group 38 64218485 63.55
Indian 38 64218485 63.55
Public 35206 36831591 36.44
Institutions 104 13799115 13.65
Non Institution 35102 23032476 22.79
Grand Total 35244 101050076 99.99
Total 104 institutions hold position in Marksans with total holding of 13.65%
COMPANY PROFILE OF MARKSANS PHARMA, NSE, INDIA
Date of Incorporation 16-Apr-1992
Date of Listing 21-Jan-2002
Management
Name Designation
Mark Saldanha Chairman & Managing Director
Vinay Gopal Nayak Executive Director
Ajay S Joshi Independent Director
Naresh B Wadhwa Independent Director
Seetharama S Buddharaju Independent Director
Sandra Saldanha Whole Time Director
Registered Office Address
11th Floor, Grandeur,Veera Desai Extension Road,Oshiwara, Andheri (West),,400053,Mumbai,Maharashtra,India
Website
http://www.marksanspharma.com
Category & Name of the Shareholders No. of shareholder Total no. shares held % Holding
Institutions 60 56376999 13.78 Mutual Funds 2 103003 0.03 Financial Institutions/ Banks 4 532741 0.13 Any Other (specify) 54 55741255 13.62 MONDRIAN EMERGING MARKETS SMALL CAP EQUITY FUNDL.P.
1 9324413 2.28
FOREIGN INSTITUTIONAL INVESTORS 54 55741255 13.62
CALIFORNIA PUBLIC EMPLOYEES' RETIREMENT SYSTEM
MANAGED BY WASATCH ADVISORS INC. 1 5226566 1.28
WASATCH EMERGING MARKETS SMALL CAP FUND 1 7951373 1.94
Page 18 Source: Company, www.dynamiclevels.com
Investment Rationale
Marksans Pharma Ltd. received an approval from the U.S. health regulator for an Abbreviated New Drug
Application (ANDA) for Loratadine Liquid Filled Capsules 10 mg on 25th Sep 2016.
Marksans R&D capabilities include dossier development, chemical synthesis, process optimization,
formulation development, analytical development and conducting stability studies.
Marksans have a team of over 50 experienced scientists specializing in formulation development and
analytical development.
The company has achieved global recognition within a very short span of time and has major global
expansion plans for the near future.
Companies key focus areas lie in the OTC & prescription drugs that have wide-ranging applications
across fields like Oncology, Gastroenterology, Antidiabetic, Antibiotics, Cardiovascular, Pain
Management, Gynaecology, among others.
Marksans Pharma’s premier manufacturing and R&D facility is located at Goa, India. The formulation
plant is spread across an 18,000 square feet campus. The plant is a 100% EOU has been designed to
accommodate rapid future expansion.
Company’s total expenditure has gone down drastically from Rs. 214.28 crs to Rs. 183.31 crs almost
14.45%.
Company has lower down its interest outgo.
From loss company has posted positive result. From Rs. -5.76 crs to Rs. 1.02 this can be turnaround for
the company.
Total 104 institutions hold position in Marksans with total holding of 13.65%
Marksans Pharma has fallen from Rs. 113.90 in Dec 2015 and came down to Rs. 33.50 in March 2016
after company failed to clear an inspection by the UK drug regulator. The company got a notice of
deficiency from UK MHRA. The inspection is about to over and result is expected to come positive.
We recommend BUY in Marksans Pharma @ 49 with the target of 70 in Long term
Page 19 Source: Company, www.dynamiclevels.com
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![Prepared! - Marksans Pharmamarksanspharma.com/pdf/annual-report/annual-report-2016...Projected global healthcare expenditure [Source: Deloitte and Evaluate Pharma] 6.5 4 194 1.06 CAGR](https://static.fdocuments.in/doc/165x107/5f2188fbf6c159765c74d874/prepared-marksans-projected-global-healthcare-expenditure-source-deloitte.jpg)
