HDFC Securities is bullish on Dishman Carbogen Amcis has recommended buy rating on the stock with a target price of Rs 415 in its research report dated October 01, 2018.
HDFC Securities' research report on Dishman Carbogen Amcis
DCAL’s FY18 annual report highlights its focus on cost optimization, improving business mix, commitment to reduce debt, strong hedging policies and reduced free cash flow due to higher capex in FY18. The revenue, EBITDA, and PAT largely remained flat in FY18 owing to fully utilized developmental capacity in Switzerland entity (~56% of revenues) and reduced supplies of old products like Eprosartan from India. However, it started the supplies of Niraparib API to a CRAMS partner in FY18, which is expected to become a blockbuster product globally. Going ahead in FY19, we expect DCAL to benefit from the falling rupee, expanded development capacity, ramp up in commercial supplies and improved profitability of Vitamin D business.
Remain constructive on its CRAMS thesis with 15 novel molecules in late phase III for its partners. Maintain BUY with a TP of Rs 415 (11x EV/EBITDA).
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