Buy Dishman Pharma; target of Rs 133: Angel Broking

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Buy Dishman Pharma; target of Rs 133: Angel Broking

Angel Broking is bullish on Dishman Pharma and has recommended buy rating on the stock with a target of Rs 133 in its August 1, 2011 research report.

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Angel Broking is bullish on Dishman Pharma and has recommended buy rating on the stock with a target of Rs 133 in its August 1, 2011 research report.

"For 1QFY2012, Dishman Pharmaceuticals' (Dishman) results were broadly in-line with our estimates. Growth was majorly led by income received by outsourcing certain products in the marketable molecules business, which the company expects to be recurring at Rs50cr-70cr annually. Dishman is gradually working on the restructuring of Carbogen Amcis, with 25% reduction in its employee strength, which led to 5mn CHF saving for the company in FY2011. On the guidance front, management expects top-line growth of 15% for FY2012, with OPM of ~21.5%. For Carbogen Amcis, the company expects a muted performance in FY2012, with restructuring efforts to be visible in FY2013."

"Dishman reported net sales of Rs237.2cr (Rs202cr), registering 17.5% yoy growth and above our estimates of Rs227.1cr. Gross margin during the quarter declined to 69.0% (72.3%), leading to OPM contracting to 18.4% (22.0%). Net profit declined by 44.5% yoy to Rs15cr (Rs27.3cr), in-line with our estimates. Segment wise, CRAMS grew by 11.2% yoy, whereas the market molecules business surprised with 32.5% yoy growth. For FY2012, management expects 15% growth on the top-line front, with OPM of ~21.5%. We expect net sales and net profit to come in at Rs1,115cr and Rs75.1cr, respectively, in FY2012. At current levels, Dishman is trading at 9.4x and 7.8x FY2012E and FY2013E earnings, respectively. We have been conservative on the margin front and maintain our Buy recommendation on the stock with target price of Rs 133," says Angel Broking research report. 

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To read the full report click on the attachment