Buy Dishman Pharma; target of Rs 92: Angel Broking

Angel Broking is bullish on Dishman Pharma and has recommended buy rating on the stock with a target of Rs 92 in its May 15, 2012 research report.

“For 4QFY2012, Dishman Pharmaceuticals (Dishman) reported lower-thanexpected sales, while its net profit came in above our expectations. Sales and net profit came in at Rs350cr and Rs31cr vs. our expectation of net sales and profit of Rs383cr and Rs28cr, respectively. During the quarter, the company’s OPM expanded significantly. We maintain our Buy rating on the stock.”

“Dishman reported net sales of Rs350cr during 4QFY2012, reporting 1.7% yoy growth and below our estimate of Rs383cr. Segment wise, the CRAMS business grew by 13.8% yoy, whereas the market molecules (MM) business declined by 13.8% yoy. Gross margin for the quarter expanded significantly to 65.4% from 54.9% in 4QFY2011. However, low top-line growth restricted the expansion in OPM to 23.5% (16.1% in 4QFY2011). Consequently, the company reported net profit of Rs31cr in 4QFY2012 as compared to Rs23cr in 4QFY2011.”

“We expect Dishman’s net sales and net profit to come in at Rs1,538cr and Rs92.8cr, respectively, in FY2014. At current levels, Dishman is trading at 4.6x and 3.7x FY2013E and FY2014E earnings, respectively. Despite being conservative on the margin front, we believe current valuations are attractive. Hence, we maintain our Buy recommendation on the stock with a target price of Rs92,” says Angel Broking research report.

Institutional holding more than 40% in Indian cos

Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.

To read the full report click on the attachment

Read More