Gorakshakar told CNBC-TV18, "We like Nectar Lifesciences primarily because the valuations at current price are quite attractive. In fact it trades at just about 5 times FY10 numbers. If one looks at the financials for the first 9 months, company is based in North India into semi synthetic penicillin's and APIs the company has shown remarkable growth in the third quarter. EBITDA margins are close to 20% plus."
He further added, "They have recorded a turnover of close to Rs 700 crore compared to a top-line of almost Rs 730 crore last year. So traction has been pretty aggressive and sharp. The company has recorded a bottom-line of almost Rs 80 crore plus for the first 9 months. We are awaiting the Q4 numbers and compared to last year profit of Rs 55 crore the bottom-line definitely is going to show robust growth."
"Our sense is that on equity of Rs 15 crore these bottom-line numbers look very attractive and the profitability is going to be sustain looking at the fact that they have put in about Rs 100 crore at a plant recently. The company has also raised money through a QIP recently roughly at around Rs 35 aggregating about Rs 91 crore. So to that extent there is a buffer built in the price. The stock is currently trading at Rs 39. Our sense is that for a year's perspective this midcap stock can definitely give a return of almost 30-35% with a target price of Rs 51."
