Buy Twilight Litaka; target of Rs 125: Sunidhi Securities

“Twilight Litaka Pharma (TLPL) incorporated in 1974; it has its plants at Pimpri, Vadgaon, Vasai (Near Mumbai) and Baddi (Himachal Pradesh). TLPL manufactures Anti-TB formulations, Dietary food supplements, Veterinary products, Nutraceuticals and General Medicines. Recently, it acquired majority stake in Briocia Pharma (India) Pvt. Ltd for Rs 25 crore, which has become a wholly owned (100%) subsidiary. Briocia has its large plant of around 32 acres near Jejuri, Pune. TLPL is servicing the domestic healthcare industry with cost-effective, quality products and services across a wide variety of therapeutic segments from antiinfectives, pain management, skin, women and pediatric care, cough and cold, nutrients, tonics and mineral supplements. Exports account for about 10 per cent of the company's sales turnover.”

“TLPL has reported ~32% CAGR in net sales and ~37% in net profits over FY06 - FY10. It markets over 60 products through its five divisions -gynecology, dermatology, cardiology, general physicians, and surgeons. TLP exports nearly 10% of its products to over 40 countries and has plans to register its products in 10 more countries. TLPL markets over 60 products with a field force of over 1,200 persons in the domestic market across its all five therapeutic categories. It has a customer base of over 1, 00, 000 doctors for 145 formulations. TLPL's branded domestic formulations business brings in 35% where it has a relatively strong presence in the tier-II and hinterland markets with over 60 products across all its therapeutic categories. It is also in the midst of a major push into nutraceuticals and dietary food supplements leveraging on its manufacturing expertise for protein-based products.”

“TLPL has received approvals from Sri Lanka and Malawi for the facility in Baddi factory. It also received HACCP certification for food facility which is an International certification parallel to WHO/GMP certification. TLPL has made entry in the UK market and also intends to enter into the US market by introducing its range of nutraceutical products.  The Indian Pharmaceutical industry is the fourth largest market in Asia Pacific after Japan, China and South Korea. The industry ranks 3rd in terms of volume and 13th in terms of value in the world. India's market share in the global contract manufacturing business is likely to more than double to 7% in 2007-2012. The market will grow from USD 800 million to USD 3 billion, giving rise to a significant opportunity for well-established CRAMS players. At the CMP of Rs 94, the share is trading at a P/E of 3.8x on FY11E and 3.3x on FY12E. We recommend BUY with a target of Rs 125 in the medium term,” says Sunidhi Securities research report.

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