Brokerage house Ajcon Global is bullish on Bharat Immunologicals and has recommended buy rating on the stock with a target price of Rs 600 in its research report dated March 19, 2015.
Ajcon Global 's report on Bharat Immunologicals and Biologicals Corporation
"Bharat Immunologicals and Biologicals Corporation Ltd. (BIBCOL) is a leading biotechnology company (Govt. of India undertaking) and has its Oral Polio Vaccines (OPV) plant in state of Uttar Pradesh, India. The company currently manufactures and produces a range of pharmaceuticals products such as Oral Polio Vaccines (OPV Vaccine), Zinc Tablet & Diarrhea Management Kit etc. The Company was established for supply of Oral Polio Vaccine for meeting national Immunization programme of Government of India. Bharat Immunologicals and Biologicals Corporation Limited (BIBCOL) is a Central Public Sector Unit, under the Department of Biotechnology, Ministry of Science & Technology, Government of India. Commercial production was started in the year 1996 and since then contributed significantly to the National Immunizations Programme. The Company boasts of the fact that it has a series of 'firsts' to its credit. It is the first Indian Company to provide Oral Polio Vaccine in the country since 1990. It is also the first to offer alternate therapy for diarrhoea treatment which involves production of Zinc Dispersible tablets through technology diffusion from M/s Nutriset, France, a technology having an international patent; a Diarrhoea treatment Combo-Kit; dispersible Iron-Folic Acid tablets; Vitamin and Mineral Mixtures and other health care products developed through in-house R & D.For 9MFY15, the Company reported yoy growth of 24% topline and an impressive EBITDA growth of 136%. PAT too witnessed a robust performance, yoy growth of 136% to touch Rs. 4.56 crores."
"In FY14, the Company has recorded highest ever revenue in vaccine (OPV) segment and witnessed a yoy growth of 15% to touch Rs. 199.3 crores. In Pharma segment (Zinc + Kit) it generated Rs. 3.37 crores, yoy growth of 2%. BIBCOL is targeting the segment of malnourished children and has planned for development of products. BIBCOL Board has been reconstituted with wide experienced scientific experts having Chairmanship of Prof. M. K. Bhan, the renowed entity in scientific field. BIBCOL has started working on different scientific projects like Zinc Syrup, Ready to use Therapeutic food for malnourished children, dispersible Iron – Folic Acid tablets for treatment of anemia, Mineral Vitamin Mix powder and high energy food for severely malnourished children. The Company is expecting commercialization of these products in the near future."
"At CMP, the stock is trading at a P/E of 25x at 9M FY15 Annualized Rs. 1.41 and 18x FY14 EPS of Rs. 2.06. With due consideration to factors like a) Government of India’s thrust on National Immunization, b) gaining importance of Infant health among public, provide an opportunity for new healthcare products, c) pioneer in oral polio vaccines, d) leadership position in oral vaccination space, e) long standing history of over 15 years, f) favourable capital structure, g) positive Networth despite accumulated losses, h) Company in turnaround phase as evident by reduction in Accumulated losses (accumulated losses of the Company does not exceeds fifty percent of its Networth, we recommend a “BUY” on the stock with a price target of Rs. 60 (25x at street estimated FY16 estimated EPS of Rs. 2.4) an upside of 66%, over a period of 3 months", says Ajcon Global's research report.
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