Venus Remedies Research Report Update

C O M P A N Y U P D A T E

India

Oct 15, 2013 Venus Remedies Rs 207

Sec to r :Pharma Reach ing t he R&D t ipp ing po int

Four-s reports are available on BLOOMBERG, Reuters, Thomson Publishers and Market Publishers

BSE Code 526953 NSE Code VENUSREM CMP (Oct 2’) 207 52W H/L 327/158 Nifty 6,089 Sensex 20,547 Equity Cap (m) 3,791 Face Value 10 Shares (m) 11.44 Free Float 47.5% Market Cap (m) 2,371 3M Avg Vol 12,857

Rs

Consolidated Financials

FY'11 FY'12 FY'13

Sales 3,631 4,098 4698

EBITDA 892 1,028 1201

PAT 462 470 573

EBITDA(%) 24.6 25.1 25.6

PAT(%) 12.7 11.5 13.4

ROE(%) 22.6 17.3 16.7

ROCE(%) 19.1 16.3 15.9

P/E Ratio(x) 3.9 3.4 4.1

EV/EBITDA(x) 4.1 3.6 4.3

EPS (Rs) 50.6 48.3 54.4

Rs mn

43.99

8.58

0.07

15.82

31.54

Shareholding 30 Sep 2013

Promoter

FII

DII

Bodies Corporate

Others

-

50

100

150

200

250

300

350

400

Oct-12 Dec-12 Mar-13 Jun-13 Sep-13

Venus Remedis Sensex

With more than half of its 25 R&D product portfolio

commercialised and acceleration in global out-

licensing of its research-based products underway,

Venus Remedies (Venus) research programme has

today come of age. The 13 commercialised R&D

products are already generating 27% of the

company’s revenue at a higher EBITDA of ~40%.

Venus has been consistently driving growth at 10-

14% for the past 6 quarters. Now, as it moves

towards its goal to reach Rs 10bn by FY 17, the R&D

contribution is at a tipping point. The flagship product

‘Elores’ is expected to get Market Authorisation (MA)

for EU in a few quarters, whereas other key R&D

products Potentox and Vancoplus continue to

progress in international and domestic market.

Meropenem deal with Mylan for France opens up

lucrative EU Meropenem market

Venus received boost to its in the lucrative $270mn EU

Meropenem market with the signing of a non exclusive

marketing deal with Mylan in France after receiving MA. The

company expects to double its revenue to €10mn from

Meropenem by the end of FY14.

Blockbuster Elores receives patent in Japan

Elores has received patent from the Japanese patent office

opening access to a huge market opportunity in the $10.5bn

Japanese antibiotic market. The company is expected to

launch its blockbuster drug in Japan by the end of 2015.

Elores has already seen impressive response in the Indian

market since its launch and is expected to contribute Rs

150-200cr by FY2017.

Receives PIC/S GMP from Ukraine, to double exports

in FY14

The company received PIC/S GMP for all of its 9 facilities

from Ukraine, one of the largest pharma markets in EU

estimated at $3bn.

Continues to post strong growth and stable margins

The company has posted good growth in Q1 FY14 of 13% Y-

o-Y with revenue of Rs 1,267mn on account of anti-cancer

and export growth. It posted PAT of Rs 153mn, up by 9% Y-

o-Y

Valuations

Venus currently quotes at 4.1x ttm EPS. We believe the

market is completely ignoring the strength of its R&D

products pipeline and success they are getting in new

markets.

Company Report: Venus Remedies 15 Oct 2013

2

Company continues on stable growth path

Particulars (Rs mn) Q1 FY'14 Q1 FY'13 % Chg YoY Q4 FY'13 % Chg QoQ

Net sales 1267 1120 13.0% 1250 1.3%

Other operating income 6 5 4.6% 3 94.8%

Total Operating Income 1272 1126 13.0% 1253 1.5%

Total Expenditure 956 829 15.4% 952 0.4%

Consumption of Raw

Materials 753 652 15.3% 786 -4.2%

(Increase) / Decrease In

Stock In Trade & WIP -3 -30 -90.6% -32 -91.2%

Employees Cost 59 57 3.6% 59 0.5%

Other Expenditure 147 149 -1.1% 140 5.3%

EBITDA 316 297 6.3% 301 5.1%

Depreciation 95 78 22.7% 80 19.1%

EBIT 221 220 0.6% 221 0.0%

Interest & Finance

charges 67 76 -12.3% 62 8.3%

Other Income 8 1 549.2% -4 -337.1%

PBT 162 145 12.1% 156 4.2%

Tax Expense 9 4 115.1% 36 -75.1%

PAT 153 141 9.0% 120 28.1%

Rs mn *Standalone (Source: Capitaline, company reports)

Strong 13% growth in the quarter, in line with expectations

Venus has delivered healthy consistent growth over the last few

quarters in the range of 10-14%. It posted strong 13% revenue

growth Y-o-Y in Q1 FY14. With a solid base of generic injectables

products and strong R&D product portfolio, Venus is expected to

maintain growth momentum over next several years.

Driven by exports and anti-cancer segment growth

Exports up 27%

The company has seen good traction in exports which grew 27.3%

YoY to reach Rs 444mn, up from Rs 349mn in Q1FY13. The company

has been making continuous progress in growing its export markets.

It entered 6 new countries last year including Iran, Ethiopia, Costa

Rica, Zimbabwe, Slovakia and Austria. In the last quarter, it entered

2 new countries, Venezuela and Zorba. This extended reach is

helping to grow exports for its R&D as well as generic products.

Exports grew 20% last quarter contributing 31% to its revenue and

continue to remain a key driving force.

Anti-cancer continues to be the pivotal strategic segment for the

company with more than 30 injectibles products in its kitty. Anti-

cancer products sale grew 16.2% YoY to Rs 410mn in the last


3

Anti-cancer

grew by 16%

quarter compared to Rs 353mn in Q1FY13 and contributed 32% to

revenues in the last quarter.

Institutional sales also grew significantly at 17% Y-o-Y in the last

quarter, reaching Rs 105mn up from Rs 90mn in Q1FY13 with the

Cephalosporin (Inc Carbapenem) segment growing 19% Y-o-Y.

The company is expected to maintain 13-15% growth for next few

quarters as it is adding new export markets and expanding its

product kitty. Recent out-licensed deals are expected to bolster top-

line once it starts exporting its R&D products to regulated countries

through these deals.

Retains profitability

Growing contribution from anti-cancer segment and increase in R&D

products revenue has helped maintain and further improve the

overall profit profile. Despite facing margins pressure in its generics

business due to increasing competition, the company has managed

to more than compensate with increasing R&D products and growing

exports. As a result, the company has maintained strong profitability

profile with 25% EBITDA margins and 12% net margins. EBITDA

grew 6% YoY from Rs 297mn in Q1FY13 to Rs 317mn in Q1FY14. It

posted net profit of Rs 153mn up by 9% YoY compared to Rs 140mn

in Q1FY13.

Key Ratios Q1 FY'14 Q1FY'13 Q4FY'13

EBITDA Margin 24.8% 26.4% 24.0%

Net Margin 12.0% 12.5% 9.5%

Total Expenditure/ Total Operating Income 75.2% 73.6% 76.0%

Raw Material Cost/ Total Operating Income 58.9% 55.3% 60.2%

Staff Cost/ Total Operating Income 4.7% 5.1% 4.7%

Other Expenditure/ Total Operating Income 11.6% 13.2% 11.1%

*Standalone (Source: Capitaline, company reports)


4

Margins compare favourably with peers

Venus Remedies continued to maintain its margin edge over its mid-

size pharma peers& Injectable peers. The high margin oncology

segment, which contributed around 32% to revenue, and R&D

products, which contributed 27% to total revenue, are key drivers of

strong margins.

As research products contribution to revenue is expected to move

up, margins are expected to increase going forward.

Better profitability supporting the growth

Company

Q1 FY14 Total

Income EBITDA

EBITDA

Margin

Net

Income

Net Income

Margin

Mid-Cap Peers

Ajanta Pharma 2154 580 27% 325 15%

Indoco Remed 1481 245 17% 92 6%

Natco Pharma 1674 482 29% 218 13%

Suven Life 1087 462 43% 298 27%

Average 1599 442 29% 233 15%

Injectable Peers

Strides Arcolab 1508 273 18% 22 1%

Ahlcon Parentera 283 87 31% 50 18%

Parenteral Drug* 1330 50 4% -15 -1%

Claris Life 2022 685 34% 182 9%

Average 1285 273 22% 60 7%

Venus 1266 316 25% 153 12%

(Source: Capitaline, company reports) Rs mn

*Excl Exceptional items


5

Meropenem to drive exports growth in European markets

To double

revenue from

Meropenem in

one year to

reach €10mn

Expand reach to

15 more

countries

The company has received Marketing authorisation from the

world’s 5th largest pharma market, France, for generic injectable

Meropenem. It has already signed a non-exclusive deal with pharma

giant Mylan to sell Meropenem. It expects to double the existing

revenue from Meropenem from €5mn to €10mn within one year. It

will start exporting Meropenem to France within the next 3-4 months.

After entering the French market, the company has set its eyes on

the lucrative Meropenem EU market of $270mn. It hopes to gain a

larger chunk of this market by entering new regions and signing

similar deals with other major pharma companies.

At present, the company has MA for UK, Austria, Denmark, Finland,

Ireland, Germany, Netherlands, Poland, Slovenia, Slovakia, Sweden,

Portugal, Czech Republic, Cyprus, New Zealand, Mexico, Bosnia &

Herzegovina and Croatia.

Along with this, registration process is already under progress for

countries like Australia, Spain, Switzerland, South Africa, Malaysia

and Gulf Central Committee (GCC).

This off patented generic broad antibiotic drug is used against

diseases with broad range of serious infections caused by single or

multiple susceptible bacteria. Global Meropenem sale is expected to

cross $1bn by the end of CY2013.

The company already sells Meropenem in 35 countries and is

expected to expand its reach to 15 more countries in next quarter.

Among first 8 Indian companies to receive GLP accreditation

Among first 8

pharma

companies to

receive

accreditation

Venus Medical Research Centre, research arm of the company, got

accreditation for Good Laboratory Practices (GLP) and norms on

Organisation for Economic Cooperation and Development (OECD)

principles by National GLP and Compliance Monitoring Authority

(NGCMA). Venus Remedies is the 8th Indian pharma company to

receive this accreditation. This ensures research related data

generated from VMRC lab is acceptable to the registration authorities

of all the OECD member countries such as USA, Japan and various

European countries.

This certainly gives a cutting competitive edge to the company as it

continues to develop strong R&D products pipeline and is actively

looking for strategic partners to expand its reach in global markets.


6

R&D investments giving growth and profitability

Blockbuster drug, Elores, receives patent from Japan

Elores to drive

strong growth

in future

Elores has received another patent from Japan, the world’s second

largest pharmaceutical market. It is expected to be launched in Japan

by the end of 2015. Elores has received very good response from the

Indian market since its launch and is expected to registered revenue

of Rs 150mn in its maiden year.

Elores is also getting registered with central formularies (a list of

medications in the hospital from which the doctor will select a drug

for patients) of leading hospitals in India. This will enable

practitioners from these institutes to prescribe Elores to their

patients.

Receives PIC/S GMP Certification

To double

exports to

Ukraine to reach

$10mn

Venus received PIC/S GMO certification from Ukraine for all its 9

facilities which further opens up the huge opportunity emanating

from the Ukraine and other PIC/S countries. Venus expects to double

its exports to Ukraine from $5mn to $10mn in this year with the help

of this authorization. Venus already has a stronghold in the Ukraine

with 69 products in anti cancer, Cephalosporin, Carbapenem,

Research products and other specialty injectables segments.

Series of out-licensing deals expected in next few quarters

MA for Elores

for EU will be

turning point

With 25 research products in its portfolio and 15 products already

commercialised, Venus Remedies is at an inflection point. The

company is in the process of striking a strategic out-licensing deal

with a large MNC pharmaceutical firm to globally commercialise its

complete product portfolio. Two of the big 4 consulting firms are

helping to finalize the deal.

The company feels that the Market Authorisation for its flagship

product, Elores, will be the turning point. It has filed for EU Market

Authorization 15 months back which normally takes around 12-24

months. Once MA is received, the company feels their out-licensing

deals will gain momentum towards closure with large MNCs.

Key R&D products continue to progress favorably

All R&D products including Potentox, Vancoplus and Sulbactomax

continued to perform favourably in the last quarter. Among new

launches last year, Trois and Taxedol are performing well in the

market. Trois is expected to do Rs 40-50mn in this year and Taxedol

is expected to clock ~Rs 30mn. Company expects to launch 5 more


7

R&D products from its R&D pipeline within next 4-5 years.

Potentox : Growing at 25% 3yr CAGR with $4.5bn market

Potentox: Set to

become

blockbuster

product with

target market of

$4.5bn globally

95% success

rate against

MDR bacteria

Potentox has emerged as one of the major breakthroughs for Venus

Remedies from its Anti Microbial Resistance (AMR) based research

efforts over the years. With huge target market of $4.5bn globally, it

presents immense opportunity to become another blockbuster

product after Elores for the company in the coming years.

Potentox is a unique antibiotic adjuvant entity used for treatment of

hospital-acquired and community-acquired pneumonia and Febrile

Neutropenia. It is a super speciality product which combines

Cephalosporin and Aminoglycoside, making it effective against

penicillin and multidrug resistance bacteria.

Need for Potentox

With increasing incidence of penicillin and multidrug resistance

bacteria across the globe, effective treatment for pneumonia using

appropriate antibiotics has became a big challenge for healthcare

professionals. Cost of treatment for pneumonia has gone up with

increasing bacterial resistance towards traditional antibiotics like

penicillin, ampicillin-clavulanate, erythromycin, cefuroxime (Ceftin),

ofloxacin (Floxin), and trimethoprim-sulfanethoxazole. According to

WHO estimates, on average, 30% of adults in developed nations who

have a pneumococcal pneumonia die from the infection.

Significant Breakthrough

Venus Medical Research Center (VMRC) has come up with an

innovative drug which is effective against multidrug resistance and

acts as an instant remedy for Hospital/ Community Acquired

Pneumonia. Potentox demonstrates 95% success rates against these

multi drug resistant bacteria making it a huge success. Clinical tests

for Potentox in India have indicated 20-30% reduction in therapy cost

compared to conventional therapy.

$4.5bn Market Opportunity; safeguarded through patents

The overall global market for hospital acquired bacterial infection was

estimated at around $9bn in 2010 and Potentox is expected to target

almost 50% of this market. The market opportunity has been well

protected by the company by applying and receiving patents in most

of the major global pharma markets.

Received patent from 8 counties, got Mexico patent in last qtr

Potentox has received a 25-year patent from Mexico in last quarter

and is planning to file CTD very soon. Till now, Potentox has received

8 patents from developed countries covering USA, South Africa, New

Zealand, South Korea, Australia, Ukraine, Canada, and Mexico, along

with India. These patents are valid till 2025-2027. Patent for EU

region has also been filed.


8

Strong positive market response; growing at 25% CAGR

Potentox was launched in India in 2007, and since then it has

received very positive response. Potentox clocked revenue of ~Rs

180mn in FY13, contributing 4% to topline, making it the second

largest R&D product in the company’s portfolio. Potentox has seen

significant traction with strong growth at 25% CAGR for last 3 yrs.

Global roll out – Out licensing deal with South African Pharma

major: Adcock

To take this innovative product global, the company is currently

talking with various major MNC pharmaceutical companies for

strategic tie-ups/out-licensing deals. Recently, it struck a marketing

rights deal with South African pharma major, Adcock, for the South

African market for 15 years where it has patent till 2025. Potentox

has also received MA for the Ukraine market.

South African market opportunity

The company is expected to launch the product in the South African

market by mid of 2015 with the help of Adcock. Adcock is a $2bn

market cap company with 10% share of the private pharmaceutical

market in South Africa and the largest supplier of hospital and critical

care products in South Africa.

With the help of Adcock, the company is expecting to garner about

15% market share of ~$69mn addressable market within 3 years of

launch - nearly $10 million within three years of its launch. This will

further help drive its bottom line as research products give much

better margins (EBITDA - 40%) compared to other products.

Venus Remedies will be producing Potentox in India and selling it to

Adcock to market in South Africa. It will receive royalty along with

licensing fee though this deal.

Some key features of Potentox

Effective against wide range of gram positive and gram

negative multi drug resistance bacteria

Combats quinolones & aminoglycosides resistance and reduces

treatment time

Reduced incidences of nephrotoxicity and hepatotoxicity

Beneficial pharmaco-economically

We expect more out-licensing deals in coming years for Potentox.

With huge market opportunity for the product and 8 approved


9

patents in developed countries in place and the EU application in the

pipeline, the product has strong potential to grow.

Vision 2017 – To become Rs 10bn company

Venus Remedies has ambitious plans to become Rs 10bn company by

FY17. To achieve this vision, the company needs to grow at CAGR of

20%. It plans to achieve this growth by expanding its R&D products

revenue over the years and close some of its out-licensing deal with

large pharma MNCs for developed countries.

Risk: 16.9% shares of total share capital are pledged

16.9% shares (1.93mn) of total share capital i.e. 38.56% of

promoter’s shareholding are pledged as of 30th Jun 2013. But as

promoters has increased it’s stake from 34% in Dec 2012 to 44% as

of now, % of pledged shares has came down from 63% to 38%.

These shares are pledged as collateral to raise loan funds for

company’s various long term needs, mainly R&D investment.


10

Valuation: Heavy discount to peers despite strong performance

Company Price

Market

Cap EV

TTM

Sales

TTM

EBITDA

TTM

PAT P/E

EV/

Sales

EV/

EBITDA

Mid-Cap Peers

Ajanta Pharm* 729 25619 25951 8740 2372 1141 22.5 3.0 10.9

Indoco Reme* 74 6861 8326 6233 928 415 16.5 1.3 9.0

Natco Pharma 684 21457 24854 6566 1682 774 27.7 3.8 14.8

Suven Life 52 6097 7050 2958 865 526 11.6 2.4 8.2

Injectable Peers

Strides Arcolab 855 50606 65414 14868 3869 1474 34.3 4.4 16.9

Ahlcon Parent* 380 2736 2997 1094 288 156 17.5 2.7 10.4

Parenteral Dr 47 1212 5939 3888 42 -791 -1.5 1.5 141.4

Claris Lifescien 182 11606 15528 7719 2624 835 13.9 2.0 5.9

Average 17.8 2.6 27.2

Venus

Remedies* 207 2371 5283 4737 1215 584 4.1 1.1 4.3

Rs mn*Standalone (Source: Capitaline, company reports)

PE Band chart

Strong upside

after MA for

Elores and

momentum gain

for out-licensing

deals

Venus continues to trade at low absolute valuations, and much below

peer averages. It is currently trading at a P/E of 4.1x and EV/EBITDA

of 4.3x. The company has a strong upside in the next few quarters

once it gets MA for Elores, its strong R&D product portfolio and

consistent performance over the years.

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11

Financial Annexure

Profit & Loss Statement

Income Statement FY'08 FY'09 FY'10 FY'11 FY'12E FY'13

Gross Sales 2,165 2,692 3,144 3,637 4,106 4,698

Less : Excise Duty 9 4 4 6 7 12

Revenue from Operations 2,156 2,688 3,140 3,631 4,098 4,686

Decrease/(Increase) in

Stock -48 -82 -62 -39 -92 -103

Raw Materials Consumed 1336 1668 1885 2054 2351 2,726

Manufacturing/Other

expenses 73 107 147 171 174 173

Payments to and provision

for employees 119 141 167 200 248 273

Power & Fuel Cost 19 20 17 27 27 31

Selling and Distribution

Expenses 62 98 153 198 230 289

Administrative & Other

expenses 57 87 91 119 130 97

Miscellaneous Expenses 25 23 14 9 2 0

Total Expenses 1,643 2,063 2,413 2,739 3,070 3,485

EBITDA 512 625 728 892 1,028 1.201

Depreciation 50 68 125 181 250 331

EBIT 462 558 603 711 778 870

Other Income 19 3 2 4 5 4

Financial Expenses 48 84 141 189 275 246

Profit before tax and

Exceptional Items 433 477 464 526 508 628

Exceptional Items

-

-

-

-

-

-

Profit before tax 433 477 464 526 508 628

Tax 75 37 68 64 38 55

Profit after tax before

minority interest 358 440 396 462 470 573

Reported net profit 358 440 396 462 470 573

(Rs mn), consolidated financials


12

Balance Sheet

(Rs Mn) FY'08 FY'09 FY'10 FY'11 FY'12 FY'13

Shareholder's Equity

Share Capital 84.7 84.7 84.7 133.2 97.4 105

Common Equity 84.7 84.7 84.7 133.2 97.4 105

Reserves and Surplus 783.7 1,258.8 1,626.4 2,235.6 2,888.5 3,638

Money received against share

warrants 21.6 42.3 - - 90.2 48

Total equity capital 890.0 1,385.9 1,711.2 2,368.8 3,076.1 3,791

Liabilities

Non-Current Liabilities

Long Term Borrowings 384.0 582.4 607.0 880.0 991.2 1,291

Other Long Term Liabilities 2.8 3.0 - 1.9 2.4 5

Long Term Provisions 50.2 50.0 - 19.4 25.0 29

Deferred Tax Liability 41.8 59.9 75.7 92.4 116.4 147

sub-total 478.9 695.3 682.7 993.6 1,135.0 1,472

Current Liabilities

Short-Term Borrowings 676.0 836.0 988.0 631.6 832.4 957

Trade Payables 47.0 79.2 48.7 70.3 125.5 188

Other Current Liabilities 45.4 45.8 34.8 400.6 434.3 582

Short-Term Provisions 106.2 91.6 131.8 142.7 139.9 186

Total Liabilities and Owner's Equity 2,243.5 3,133.8 3,597.1 4,607.7 5,743.2 7,175

Non Current Assets

Intangible Assets 93.3 434.7 835.7 1,234.5 1,729.8 1,999

Net Fixed Assets 1,080.2 1,242.1 1,460.6 1,746.5 1,879.3 2,057

Capital Work in Progress 14.0 8.4 7.3 104.1 177.8 437

Total Fixed Assets 1,094.2 1,250.5 1,467.9 1,850.6 2,057.1 2,494

Long-term Loans and Advances 423.0 417.5 108.0 139.0 260.0 427

Total Long Term Assets 1,610.5 2,102.8 2,411.7 3,224.1 4,046.9 4,920

Current Assets

Inventory 277.8 445.8 619.4 754.2 968.2 1,280

Trade Receivables 168.7 329.7 283.0 357.4 401.0 471

Cash and cash equivalents 11.2 15.9 23.9 31.2 29.4 64

Other Current Assets - - - 2.0 - -

Short term Loans and Advances 174.7 238.2 260.1 238.7 297.6 441

Total Current Assets 632.4 1,029.6 1,186.4 1,383.4 1,696.3 2,256

Total Assets 2,242.8 3,132.3 3,598.0 4,607.6 5,743.2 7,176

(Rs mn)


13

Cash Flow Statement

Cash Flow Statement FY'08 FY'09 FY'10 FY'11 FY'12 FY’13

Net Profit/(Loss) before Tax 433 477 464 526 509 628

Depreciation 50 52 125 182 113 331

Deferred Employee

Compensations 4 2 2 0 0

Expenses Amortised 15 14 13 9 140

Adjustment of excess mat

Transferred to gen reserve 0 0 -15 53 38 67

Adjustment for FBT -2 -3 25 4 9 11

Operating Cash flow before

Wcap 500 541 613 774 809 1036

Adjustments for increase

/decrease in Current Assets -275 -275 -148 -327 -352 -819

Decrease / Increase in Current

Liabilities/ Provisions -33 -72 -123 -73 -39 305

Extraordinary Items -2 -4 0 0 0

Cash Generated from Operations 190 189 342 373 417 521

Direct Taxes Paid 0 0 0 0 0

Operating Cash flow- A 190 189 342 373 417 521

Purchase/Sale of Fixed Assets

(net) -743 -570 -512 -820 -873 -783

Decrease in Capital Work-in-

Progress (including capital

advances) 403 6 0 -144 -77 -258

Interest received 1 0 0 0 0

Cash from Investing activities-

B -338 -564 -512 -964 -951 -1039

Proceeds from Issue of Share

Capital 0 0 0 48 6 8

proceed from share capital(share

premium) -26 198 0 175 166 72

Proceeds from Long Term

Borrowing( Net) 133 160 25 731 112 300

Proceeds from Short term

Borrowing( Net) 22 20 153 -357 201 124

Proceeds from share warrants

48 48

Cash from Financing activities-

C 129 379 178 598 533 552

Change in Cash= A+B+C -19 5 8 7 -2 34

Opening Balance 30 11 13 24 31 29

Closing Balance 11 16 21 31 29 63

(Rs mn)


14

Ratios

Ratios FY'09 FY'10 FY'11 FY'12 FY'13

EPS 51.5 46.5 50.6 48.2 54.4

CEPS 57.5 61.3 70.6 72.7 85.7

DPS 3.0 3.0 3.0 3.0 3.0

Valuation Ratios

P/E Ratio 2.9 5.5 4.0 5.6 4.1

EV/EBITDA 4.3 5.2 3.7 4.4 4.3

EV/Sales 1.0 1.2 0.9 1.1 1.1

Profitability

EBITDA margin 23.3% 23.2% 24.6% 25.1% 25.6%

Pretax margin 17.7% 14.8% 14.5% 12.4% 13.4%

Net margin 16.4% 12.6% 12.7% 11.5% 12.2%

Return on avg. Equity 38.6% 25.5% 22.7% 17.3% 16.7%

Return on avg. Capital

employed 24.5% 20.4% 19.1% 16.3% 15.9%

Growth Ratios

Revenue growth 24.7% 16.8% 15.6% 12.9% 14.3%

EBITDA growth 22.0% 16.3% 22.6% 15.2% 18.2%

Net profit growth 10.0% -2.7% 16.8% 1.7% 23.8%

Activity/Turnover Ratios

Fixed Asset turnover (x) 2.3 2.3 2.3 2.3 2.4

Working Cap turnover (x) 4.9 4.1 3.8 3.6 3.3

Inventory turnover (x) 4.7 3.6 3.3 3.0 2.6

Inventory Days 77.9 100.9 110.9 121.7 111.2

Receivables turnover (x) 10.8 10.3 11.3 10.8 10.7

Receivable Days 33.8 35.6 32.2 33.8 33.8

Payables turnover (x) 25.1 28.5 34.5 24.0 17.4

Payables Days 14.5 12.8 10.6 15.2 12.9

Liquidity Ratios

Current Ratio 1.0 1.0 1.1 1.1 1.2

Solvency

Debt Equity 1.0 0.9 0.6 0.6 0.6

Leverage Ratio 2.3 2.1 1.9 1.9 1.9

Net Debt / EBITDA 2.3 2.2 1.7 1.8 1.8

Interest Coverage 6.1 4.3 3.8 2.8 3.5


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Venus Remedies Research Report Update

Economy & Finance

Transcript of Venus Remedies Research Report Update