 Dishman Pharma has target of Rs 65: PN VijayPublished on Tue, Nov 22, 2011 at 11:14 | Source : CNBC-TV18 Updated at Tue, Nov 22, 2011 at 11:39 5296 Investors following Dishman Pharma. Share this News with them.
Dishman Pharma has target of Rs 65, says PN Vijay, Portfolio Manager. Vijay told CNBC-TV18, "Dishman Pharma is a mid-sized pharmaceutical company based in Andhra. It came out with pretty impressive results in Q2 in the midst of generally poor results from many corporate. The topline has grown by 27% driven by a 93% growth in its marketing molecules business, the MM business as they call it, and a slightly sluggish growth in the CRAMS business of about 5% year on year, but 6% quarter on quarter." He further added, "The EBITDA growth momentum was very strong; it is more than 27%. At the bottom-line that is at the net profit level Dishman has reported a loss of Rs 6 crore driven mainly by non-cash forex provision and slightly higher interest cost of Rs 18 crore. Like many other companies, Dishman has also been hit by this strong dollar against "Going forward, we expect this momentum to continue because for many large multinationals, Dishman is the preferred supplier of marketing molecules and the sales strategy is depended on Dishman supplying. For example, for Abbot, Dishman is their sole supplier for many of their top products." "In terms of valuations the share is very attractive at about Rs 45 or so, it is trading at about 4.5-5 times current earnings which is low from historical standards. A trigger could be sale of its Chinese unit where the unit has been bogged down by various approvals by the Chinese authorities and that should improve cash flow, bring some cash back in to Dishman's balance sheet and reduce its debt. So to our mind, this stock represents 40% growth potential and I would like to put a target of about Rs 65 for Dishman over the next 12 months."
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