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Last Updated : Jul 16, 2013 06:07 PM IST | Source:

Buy Venus Remedies; target Rs 350: Sunidhi Securities

Sunidhi Securities is bullish on Venus Remedies (VRL) and has recommended buy rating on the stock with a price target of Rs 350 in its July 15, 2013 research report.

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Sunidhi Securities' report on Venus Remedies (VRL)

"During Q4FY13, standalone sales advanced by 10.1 percent to Rs 125.0 crore but net profit fell 23.1 percent to Rs 12.0 crore due to higher depreciation and tax. OP and NP margin stood at 23.8 percent and 9.6 percent against 24.9 percent and 13.7 percent respectively in the corresponding period last year. EPS for Q4FY13 stood at Rs 11.4 on enhanced equity. During FY13, sales advanced by 14.2 percent to Rs 459.1 crore and net profit by 14.4 percent to Rs 57.2 crore. OP and NP margin stood at 25.9 percent and 12.5 percent against 26.5 percent and 12.4 percent respectively in the corresponding period last year. EPS stood at Rs 54.5. A dividend of 30 percent has been declared.The debt-equity ratio as on FY13 stood at 0.6:1 whereas the value of the gross block stood at Rs 429.0 crore.

By the virtue of having selected to specialise through the injectables route in high-growth therapeutic segments like anti-infective, oncology, cardiovascular and neurology, VRL is among the world's 10 leading fixed dosage injectables manufacturers. Recently VRL has received approval from DCGI to conduct Phase-III clinical trials for its cancer detection NCE (New Chemical Entity).

VRL is present in 60 regulated and semi-regulated countries, actively exporting to around 30 countries. Venus has a broad range of products catering to critical care segment in parenterals like cephalosporins, carbapenems and oncology drugs in lyophilized form, infusions and small volume parenterals. VRL has bagged 85 patents across the world for its research products.

Contract manufacturing opportunities with leading global brands, registrations approved in many semi-regulated markets, launch of innovative products in domestic and international geographies (through marketing alliances) and entry in new global geographies through regulatory approvals (namely Thailand, Malaysia, the Philippines and Syria) and various mew launches are expected to grow its international business and give strong visibility to revenue & profitability going forward.

At the CMP of Rs 240, the share is trading at a P/E of 4.5x on FY13E and 4.0x on FY14E. We recommend BUY with a target of Rs 350 in the medium term," says Sunidhi Securities research report.

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First Published on Jul 16, 2013 06:07 pm
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