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Last Updated : Jan 10, 2013 10:00 AM IST | Source: CNBC-TV18

Wanbury can move to Rs 60: SP Tulsian

Wanbury can move to about Rs 60 in one year time, says SP Tulsian, sptulsian.com. They have 70 brands and they have the production facility at three locations one in Andhra Pradesh and two in Maharashtra at Raigad and Tarapur.


Wanbury can move to about Rs 60 in one year time, says SP Tulsian, sptulsian.com.


Tulsian told CNBC-TV18, "Wanbury is a pharmaceutical company mainly into Advanced Pharmaceutical Ingredients (API) and formulations. Among the formation space they have 70 brands and they have the production facility at three locations one in Andhra Pradesh and two in Maharashtra at Raigad and Tarapur."


He further added, "If you see their product profile, as I said they have 70 brands in their formulation portfolio and they export to at least 50 countries across the world and 50 percent of those markets are regulated markets. So one can understand about the quality and about the customers and in fact they are the preferred suppliers for the top five API users in the world. Infact they are supplying API which we call as a bulk drug."


"The only problem with the company is that for the last couple of years they have been struggling, the bottom-line margins have come under pressure. On the first half if you go by their financial performance of top line of about Rs 200 crore they incurred a loss of about Rs 7.5-8 crore. But gradually the improvement is happening and because of their focus more now going on the formulations as they have the brand value also of about 70 products, they should be able to improve much better from FY14 onwards."


"Even if you take the case of the company on the valuation parameters it has a debt of close to about Rs 300 crore and the market cap of the company is less than Rs 50 crore. So the enterprise value works out at about Rs 350 crore and it is valued now in the market at a less than one time of the topline because topline for FY13 is expected to be Rs 400 crore plus and for FY14 it is likely to be Rs 460-470 crore. So the enterprise value of the company is less than one times and in fact I am expecting good improvement in the working of the company in the times to come."


"This is the time where one should acquire these kind of stocks because if you have the manufacturing capability, if you have the product recognizations in the regulated market sooner or later either you will improve or somebody will come and take you over because obviously beyond a point even promoters will not find it viable to run the plant. So in both the cases I see good value emerging into the stock may be from a three years perspective, I expect that share can hit three digit mark but from a one year perspective, I expect the share can move to about Rs 60 or so."

Disclosure: I have no holdings in the stock discussed.



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First Published on Jan 10, 2013 09:37 am
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