Ajanta Pharmaceuticals (AJAPHA)
Ajanta Pharmaceuticals (AJAPHA)
CMP: | 1829 Target: | 2250 (23%) Target Period: 12 months BUY
February 3, 2021 Branded generics continue to grow; margins strong Q3FY21 revenues grew 15.0% YoY to | 749 crore. Domestic sales grew
12.8% to | 220 crore whereas Emerging markets (branded) grew 19.2% YoY to | 286 crore. US sales remained muted (up 1.3% YoY) at | 161 crore. Africa Particulars tender business grew 57.1% YoY to | 77 crore. EBITDA margins improved P articular Am ount 372 bps YoY to 32.3% amid better gross margins. Hence, EBITDA grew Market Capitalisation | 15961 crore 30.0% YoY to | 242 crore. PAT grew 63.7% YoY to | 177 crore. Delta vis-à- vis EBITDA was mainly due to lower tax rate (18.0% vs. 38.6% in Q3FY20). Debt (FY20) | 46 crore Cash (FY20) | 205 crore
Result Update Result
Domestic formulations - Focus on new launches, few therapies E V | 15802 crore 52 week H/L 1879/961 Domestic formulations comprise 30% of FY20 revenues. The main E quity capital | 17.5 crore distinguishing factor is the uncanny knack of launching maximum number F ace value | 2 of first time launches with focus on new drug delivery system (NDDS). Out Price performance of 270+ actively marketed brands, ~60% were first time launches. However, a slowdown in dermatology segment due to increased competition in 2000 14000 existing products and slow offtake in new launches are some near term 12000 challenges. We expect domestic formulations to grow at ~11% CAGR in 1500 10000 FY20-23E to | 1047 crore to be driven by existing products & new launches. 8000 1000 Exports traction from EMs; US generics shaping up 6000 500 4000 2000 Ajanta derives export revenues (70% of FY20 revenues) from emerging markets like Africa (Franco Africa), Asia and from US. In emerging markets, 0 0
as opposed to common practice of forging alliances with regional pharma
Feb-18 Feb-19 Feb-20 Feb-21
Aug-19 Aug-20 players, its front-end marketing team interacts directly with doctors. The US Aug-18 Ajanta Pharma(L.H.S) foray is also getting momentum. Despite volatility in African tender NSE500(R.H.S)
business, overall export formulations CAGR has been a steady 11% in FY16- 20. We expect export formulations to grow at ~13% CAGR in FY20-23E to Key risks to our call | 2564 crore driven by Asia, African branded business, strong growth in US. USFDA regulatory challenges Volatility in tender business
Valuation & Outlook
Retail Equity Research Equity Retail Q3 results were a beat on all fronts on the back of strong growth in branded generic sales in Emerging markets and India along with better gross margin – performance. While the management expects subdued domestic growth in FY21 due to Covid-19, it expects high single digit growth for branded Research Analyst business in Asia, Africa (India, Asia, Africa- ~70% of sales) along with ~20% Siddhant Khandekar growth for US. On margins front, change in product mix (higher US [email protected] revenues) notwithstanding, the management expects ~200-250 bps improvement in FY21, going ahead, with improving operating leverage and Mitesh Shah moderating capex. Overall, calculated focus, healthy margins, return profile [email protected] Securities ICICI
and lighter balance sheet are some key differentiators for Ajanta. The Sudarshan Agarwal company remains a play on global branded generics space. We maintain [email protected] BUY and arrive at our target price of | 2250 (earlier | 1960) based on 24x
FY23E EPS of ~| 93.7.
Key Financial Summary
| Crore F Y20 F Y21E F Y22E F Y23E CAGR FY20-23 (%) R evenues 2587.9 2863.9 3261.8 3682.5 12.5 E B ITDA 683.3 948.9 1011.2 1178.4 19.9 EBITDA margins (% ) 26.4 33.1 31.0 32.0 Net P rofit 467.7 621.5 682.6 828.0 21.0 E P S (|) 53.4 70.3 77.3 93.7 P E (x) 34.6 26.0 23.7 19.5 EV to EBITDA (x) 23.3 16.6 15.3 12.8 R oC E (% ) 24.7 26.7 24.8 25.2 R O E (% ) 18.1 20.3 19.1 19.7 Source: ICICI Direct Research
Result Update | Ajanta Pharmaceuticals ICICI Direct Research
Exhibit 1: Variance Analysis Q3FY21 Q3FY20 Q2FY21 YoY (%) QoQ (%) Comments YoY growth mainly due to strong growth in Asia and Africa tender Revenue 748.7 651.2 715.9 15.0 4.6 business Raw Material Expenses 168.7 169.1 155.4 -0.2 8.6 YoY Improvement mainly due to change in product mix and better gross margins (%) 77.5 74.0 78.3 344 bps -83 bps realisation Employee Expenses 136.2 120.4 130.5 13.1 4.3 Other Expenditure 202.2 175.8 155.8 15.0 29.8 Total Operating Expenditure 507.1 465.2 441.7 9.0 14.8 EBITDA 241.7 186.0 274.3 30.0 -11.9 EBITDA (%) 32.3 28.6 38.3 372 bps -603 bps YoY improvement mainly due to better gross margins Interest 2.6 1.6 1.5 62.4 66.7 Depreciation 29.1 23.6 28.3 23.5 2.9 Other income 5.5 14.6 4.9 -62.6 13.0 PBT before EO 215.5 175.4 249.2 22.8 -13.5 Less: Exceptional Items 0.0 0.3 0.0 0.0 0.0 PBT 215.5 175.1 249.2 23.1 -13.5 Tax 38.8 67.6 79.0 -42.5 -50.8 MI & Share of loss/ (gain) asso. 0.0 0.0 0.0 0.0 0.0 Adj. Net Profit 176.6 107.9 170.2 63.7 3.8 Delta vis-à-vis EBITDA mainly due to lower tax rate Key Metrics India 220.0 195.0 202.0 12.8 8.9 YoY growth on the back of revival in almost all key segments Total Export 524.0 448.0 500.0 17.0 4.8 YoY increase amid Covid related stocking and higher branded push Emerging Branded Markets 286.0 240.0 295.0 19.2 -3.1 mainly in Asian markets Sharp increase amid execution of additional orders during the 77.0 49.0 51.0 57.1 51.0 Africa - Tender quarter US 161.0 159.0 154.0 1.3 4.5 Muted YoY growth amid high base of Ranitidine
Source: ICICI Direct Research
Exhibit 2: Change in Estimates FY21E FY22E Comments (| Crore) Old New % Change Old New % Change Revenue 2,783.8 2,863.9 2.9 3,190.3 3,261.8 2.2 EBITDA 890.8 948.9 6.5 973.0 1,011.2 3.9 EBITDA Margin (%) 32.0 33.1 113 bps 30.5 31.0 50 bps Changed mainly due to better-than-expected margins in Q3 Changed in line with operational performance and lower tax rate PAT 554.1 621.5 12.2 651.9 682.6 4.7 in Q3 EPS (|) 62.7 70.3 12.2 73.8 77.3 4.7
Source: ICICI Direct Research
Exhibit 3: Change in Estimates Current Earlier Comments (| crore) FY19 FY20 FY21E FY22E FY21E FY22E Changed mainly due to faster than expected revival in key Domestic 690.0 769.0 790.3 929.9 748.8 907.0 segments Africa 502.0 594.0 644.8 687.5 616.0 668.1 Asia 528.0 674.0 746.0 824.9 734.3 825.5 US 283.0 515.0 624.8 744.9 621.2 717.5
Source: ICICI Direct Research
ICICI Securities | Retail Research 2 Result Update | Ajanta Pharmaceuticals ICICI Direct Research
Conference call highlights
Domestic Revenue bifurcation: Cardiac- | 91 crore, Ophthalmic- | 49 crore, Derma- | 39 crore, Pain- | 18 crore; Institutional sales - | 23 crore Total 80-90% doctors are back including derma and acute therapies. MR activity is in full swing Guidance for FY21 – flat to 1% and FY22 – better 13-14%. IPM + 200-300 bps going ahead Africa tender business Strong growth in Q3FY21 amid on to two months of incremental orders Guidance for FY21 - flat (| 240-250 crore). for FY22- | 200 crore one molecule- two tablet dispersible tablets US growth was muted due to Ranitidine in base. Entire lot was recalled in Q4 due to NDMA issues FY21 - three filings FY22: 10-12 filings. Total 10-12 launches planned Current price erosion- 5-7% Last USFDA inspection was in July 2019. Hence, we are expecting the same by July 2021 Sufficient capacity at Dahej Major products approvals in next one year – Fortamet and one more product Guidance for FY21- 20% and FY22- 20% CAGR for the next three to four years Emerging markets Revenue bifurcation: Asia- | 196 crore Africa- | 86 crore, LatAm - | 2 crore Asia-Philippines and Iraq opened up like India. MRs are back in most of the EM markets. Covid related stocking plus higher branded push lead to strong growth in Emerging markets Expecting Q4 to dip Guidance FY21- 12-13%. For FY22 - Africa (8-9%), Asia (12-13%) going ahead P&L items Strong gross margins in FY21 some benefit due to product mix and better realisations going ahead should be ~76% Other expenditure slightly higher than earlier guidance- activity based expenses. Guwahati Ophthalmic block opex also there. Higher depreciation- due to Guwahati Ophthalmic block of one month. Quarterly run rate to go up due to full impact Guidance for FY21 and FY22 EBITDA margins FY22- 31-32% R&D- 5% of sales (~| 170 crore with a delta of +/- 8-9%) Tax rate – FY21: 27%, FY23: 24%. 150 bps reduction every year. Capex spend and guidance – 9MFY21: 110 crore; FY21- | 150- 170 crore; FY22- 125 crore Working capital: Inventory slightly high, Receivables are back to
normal
ICICI Securities | Retail Research 3 Result Update | Ajanta Pharmaceuticals ICICI Direct Research
Exhibit 4: Trends in quarterly financials (| crore) Q 3F Y 18Q 4F Y 18Q 1F Y 19Q 2F Y 19Q 3F Y 19Q 4F Y 19Q 1F Y 20Q 2F Y 20Q 3F Y 20Q 4F Y 20Q 1F Y 21Q 2F Y 21Q 3F Y 21 Y oY (% ) Q oQ (% ) Total Operating Income 587.1 530.3 511.0 544.1 485.1 515.2 611.9 642.8 651.2 682.0 668.2 715.9 748.7 15.0 4.6 Raw Material E xpenses 110.0 93.8 84.1 95.9 97.9 105.5 142.5 166.5 169.1 177.6 153.1 155.4 168.7 -0.2 8.6 % of Revenue 18.7 17.7 16.5 17.6 20.2 20.5 23.3 25.9 26.0 26.0 22.9 21.7 22.5 -344 bps 83 bps Gross Profit 477.1 436.6 426.9 448.2 387.2 409.6 469.4 476.3 482.1 504.4 515.1 560.6 580.1 20.3 3.5 G P M (% ) 81.3 82.3 83.5 82.4 79.8 79.5 76.7 74.1 74.0 74.0 77.1 78.3 77.5 344 bps -83 bps Employee Expenses 95.2 105.2 104.8 105.8 112.8 107.4 118.3 117.4 120.4 129.5 135.8 130.5 136.2 13.1 4.3 % of Revenue 16.2 19.8 20.5 19.4 23.2 20.8 19.3 18.3 18.5 19.0 20.3 18.2 18.2 -30 bps -5 bps Other E xpenditure 184.3 191.9 164.6 176.2 167.1 175.2 182.7 181.2 175.8 223.5 156.1 155.8 202.2 15.0 29.8 % of Revenue 31.4 36.2 32.2 32.4 34.5 34.0 29.9 28.2 27.0 32.8 23.4 21.8 27.0 2 bps 525 bps Total E xpenditure 389.6 390.8 353.5 377.9 377.8 388.1 443.6 465.1 465.2 530.6 445.0 441.7 507.1 9.0 14.8 % of Revenue 66.4 73.7 69.2 69.5 77.9 75.3 72.5 72.4 71.4 77.8 66.6 61.7 67.7 -372 bps 603 bps E B ITDA 197.5 139.5 157.5 166.2 107.3 127.1 168.4 177.6 186.0 151.3 223.2 274.3 241.7 30.0 -11.9 EBITDA Margin (% ) 33.6 26.3 30.8 30.5 22.1 24.7 27.5 27.6 28.6 22.2 33.4 38.3 32.3 372 bps -603 bps Other Income 15.2 5.2 8.1 15.2 4.4 1.6 7.6 13.2 14.6 56.7 13.1 4.9 5.5 -62.6 13.0 Interest 0.1 0.1 0.2 0.1 0.1 0.8 1.8 4.9 1.6 3.6 1.6 1.5 2.6 62.4 66.7 Depreciation 15.0 16.6 17.2 17.5 18.7 18.8 22.8 23.3 23.6 26.0 28.0 28.3 29.1 23.5 2.9 P B T 197.5 128.0 148.3 163.8 93.0 109.2 151.5 162.6 175.4 178.4 206.7 249.2 215.5 22.8 -13.5 Total Tax 50.1 33.5 42.5 38.5 26.1 20.3 36.8 45.2 67.6 46.7 58.9 79.0 38.8 -42.5 -50.8 Tax rate (% ) 25.3 26.2 28.7 23.5 28.0 18.6 24.3 27.8 38.5 26.2 28.5 31.7 18.0 -2048 bps -1368 bps PAT 147.5 94.5 105.8 125.4 66.9 88.9 114.6 116.4 107.6 129.2 147.8 170.2 176.6 64.2 3.8 PAT Margin (% ) 25.1 17.8 20.7 23.0 13.8 17.3 18.7 18.1 16.5 18.9 22.1 23.8 23.6 707 bps -19 bps Source: ICICI Direct Research
ICICI Securities | Retail Research 4 Result Update | Ajanta Pharmaceuticals ICICI Direct Research
Company Background Established in 1973, Ajanta Pharma (Ajanta) is mainly into exports as well as domestic formulations. As of FY20, the exports: domestic formulation ratio was at 70:30. The company owns eight manufacturing facilities- four in Aurangabad (Maharashtra), one each in Dahej (Gujarat), Guwahati (Assam), the newly operationalised Pithampur (Madhya Pradesh) and Mauritius. Of these facilities, only one in Aurangabad is an API facility. The rest are all formulations. Consolidated revenues, EBITDA and PAT have grown at a CAGR of 10.3%, 4% and 3.2%, respectively, in FY16-20. Ajanta Pharma (Ajanta) had come out with a maiden IPO in March 2000. It raised | 68 crore, which was earmarked for capacity expansion and debt repayment.
Domestic formulations constitute 30% of the total consolidated turnover (FY19). This segment has been further segregated into two sub-segments- 1) branded formulations and 2) institutional business. Initially, the company was catering to the institutional business. The institutional sub-segment accounts for ~8% of domestic formulations and is mainly confined to government and institutional tenders. It is only in the last 10 years that the focus shifted to the branded formulations business, which now accounts for 92% of domestic formulations.
The company focuses on only a few so called specialty therapies – ophthalmology, dermatology and cardiology. Together, these therapies constitute ~92% of domestic branded formulations. Ajanta invested heavily in the technology and field force, especially in the first five years after the changed focus. The focus was also to offer novel delivery system. From | 17 crore in FY05, formulations have grown to | 705 crore in FY20. Till date, the company has launched 270+ products out of which 60% are first time launches. The current MR strength is 3000+. Overall, domestic branded formulations have grown at ~9% CAGR in FY16-20 to | 705 crore. The company has only one product under the National List of Essential Medicines (NLEM) 2011 list.
Export formulations constitute 70% of total revenue (FY20). Exports are mainly confined to emerging markets and constitute branded generics. APL exports its products in ~31 emerging markets with a significant presence in Franco African countries and Philippines.
Asia accounts for ~38% of export formulations followed by Africa and the US with 33% and 29% contribution to exports, respectively. The company also participates in anti-malarial tenders in Africa. It operates through 710+ MRs in these emerging markets. APL owns a portfolio of more than 1350 registered brands in these markets encompassing major therapies such as anti-infectives, anti-malarials, ophthalmic, dermatology, cardiovascular, GI, etc. The company also has a marginal presence in Latin America. It has also forayed into regulated markets such as the US where it has filed 60 ANDAs and received approvals for 42.
ICICI Securities | Retail Research 5 Result Update | Ajanta Pharmaceuticals ICICI Direct Research
Exhibit 5: Revenues to grow at ~12% CAGR over FY20-23E Exhibit 6: Domestic formulations (| crore) CAGR 12.5% CAGR 10.8% 4000 CAGR 10.3% 3682 1200 CAGR 9.3% 3262 1047 3500 930 2864 1000 3000 2588 769 790 690 2500 2131 2053 800 614 629 2002 539 2000 1749 600 1500 (| crore) (| 400 1000 200 500 0 0 FY16 FY17 FY18 FY19 FY20 FY21E FY22E FY23E FY16 FY17 FY18 FY19 FY20 FY21E FY22E FY23E
Revenues Domestic Formulations
Source: ICICI Direct Research, Company Source: ICICI Direct Research, Company
Exhibit 7: Domestic dermatology segment (| crore) Exhibit 8: Domestic cardiology segment (| crore) 300 600 CAGR 11.6% CAGR 11.4% 250 CAGR 3.0% CAGR 8.1% 435 200 175 388 156 400 350 142 139 138 295 315 150 123 125 122 252 247 203 100 200 50
0 0 FY16 FY17 FY18 FY19 FY20 FY21E FY22E FY23E FY16 FY17 FY18 FY19 FY20 FY21E FY22E FY23E Dermatology Cardiology
Source: ICICI Direct Research, Company Source: ICICI Direct Research, Company
Exhibit 9: Domestic ophthalmology segment (| crore) Exhibit 10: Export formulations (| crore) 400 CAGR 12.7% CAGR 8.2% CAGR 9.3% 3000 CAGR 11.1% 2564 2268 244 2500 2028 218 1790 193 2000 181 172 177 1319 1432 1323 200 154 1500 1177 135 1000 500 0 0 FY16 FY17 FY18 FY19 FY20 FY21E FY22E FY23E FY16 FY17 FY18 FY19 FY20 FY21E FY22E FY23E Ophthalmology Export formulations
Source: ICICI Direct Research, Company Source: ICICI Direct Research, Company
ICICI Securities | Retail Research 6 Result Update | Ajanta Pharmaceuticals ICICI Direct Research
Exhibit 11: Africa revenues (| crore) Exhibit 12: Asia revenues (| crore)
CAGR -3.4% CAGR 7.4% 1000 CAGR 11.1% 924 738 735 CAGR 9.5% 825 800 712 688 746 682 645 800 700 594 674 600 502 528 600 469 493 500 418 400 400 300 200 200 100 0 0 FY16 FY17 FY18 FY19 FY20 FY21E FY22E FY23E FY16 FY17 FY18 FY19 FY20 FY21E FY22E FY23E Africa Asia
Source: ICICI Direct Research, Company Source: ICICI Direct Research, Company
Exhibit 13: US revenues (| crore) Exhibit 14: EBITDA & EBITDA margins trend
CAGR 20.2% 1400 33.1 40 1000 894 1011 1178 1200 34.4 36 CAGR 145.2% 33.6 32.0 32 745 30.9 949 31.0 800 1000 27.1 28 625 800 689 658 683 24 600 515 587 556 26.4 20
600 16 (%)
400 283 crore) (| 400 12 193 8 185 200 200 4 14 0 0 0 FY16 FY17 FY18 FY19 FY20 FY21EFY22EFY23E FY16 FY17 FY18 FY19 FY20 FY21E FY22E FY23E EBITDA EBITDA Margins (%) US Source: ICICI Direct Research, Company
Source: ICICI Direct Research, Company
Exhibit 15: PAT & PAT margins trend Exhibit 16: Return ratios 828 900 28 58 23.8 25.3 800 22.0 683 24 700 622 20.9 22.5 50 20 46.0 600 507 21.7 469 472 42 41.3 416 18.7 18.1 16 500 385 36.7
400 34 (%) 12 (%) 32.3 300 30.0 24.8 (| crore) (| 8 26 24.7 26.7 25.2 200 23.0 21.8 4 20.3 19.7 100 18 17.1 18.1 19.1 0 0 10 FY16 FY17 FY18 FY19 FY20 FY21EFY22EFY23E FY16 FY17 FY18 FY19 FY20 FY21E FY22E FY23E Net Profit Net Profit Margins (%) RoCE (%) RoE (%)
Source: ICICI Direct Research, Company Source: ICICI Direct Research, Company
Exhibit 17: Valuation Revenues G rowth EPS G rowth P/E EV/EBITDA RoE RoCE (| crore) (%) (|) (%) (x) (X) (%) (%) F Y 20 2588 26.1 53.4 21.6 34.6 23.3 18.1 24.7 F Y 21E 2864 10.7 70.3 32.9 26.0 16.6 20.3 26.7 F Y 22E 3262 13.9 77.3 9.8 23.7 15.3 19.1 24.8 F Y 23E 3682 12.9 93.7 21.3 19.5 12.8 19.7 25.2 Source: ICICI Direct Research
Exhibit 18: Shareholding Pattern (in %) Dec-19 Mar-20 Jun-20 Sep-20 Dec-20 P romoter 70.5 70.5 70.5 70.5 70.3 O thers 29.5 29.5 29.5 29.5 29.7 Source: ICICI Direct Research, Company
ICICI Securities | Retail Research 7 Result Update | Ajanta Pharmaceuticals ICICI Direct Research
Financial Summary
Exhibit 19: Profit & Loss (| crore) Exhibit 20: Cash Flow Statement (| crore) (Year-end March) F Y20 F Y21E F Y22E F Y23E (Year-end March) F Y20 F Y21E F Y22E F Y23E Total Operating Income 2,587.9 2,863.9 3,261.8 3,682.5 Profit/(Loss) after taxation 509.1 621.5 682.6 828.0 G rowth (% ) 26.1 10.7 13.9 12.9 Add: Depreciation & Amortization 95.7 118.1 130.4 154.3 Raw Material E xpenses 655.7 652.1 766.5 847.0 Net Increase in Current Assets -316.4 -136.7 -286.7 -321.0 Gross Profit 1,932.2 2,211.8 2,495.3 2,835.5 Net Increase in Current Liabilities193.2 -44.2 47.7 50.3 Gross Profit Margins (% ) 74.7 77.2 76.5 77.0 O thers -24.9 8.3 10.2 10.2 Employee Expenses 485.6 541.0 603.4 662.8 CF from Operating activities 456.8 566.9 584.2 721.8 Other E xpenditure 763.2 721.9 880.7 994.3 Total Operating E xpenditure 1,904.5 1,915.0 2,250.6 2,504.1 (Purchase)/Sale of Fixed Assets-229.0 -220.0 -125.0 -125.0 EBITDA 683.3 948.9 1,011.2 1,178.4 Investments -1.7 -125.0 -200.0 -200.0 G rowth (% ) 23.0 38.9 6.6 16.5 O thers 7.3 1.0 1.1 1.1 Interest 11.9 8.3 10.2 10.2 CF from Investing activities -223.4 -344.0 -323.9 -323.9 Depreciation 95.7 118.1 130.4 154.3 Other Income 92.2 29.3 45.7 75.5 (inc)/Dec in Loan 9.7 0.0 0.0 0.0 PBT before Exceptional Items667.9 851.9 916.2 1,089.4 Dividend & Dividend tax -115.9 -155.1 -170.3 -206.6 Less: E xceptional Items 3.9 0.0 0.0 0.0 O ther -22.4 -8.3 -10.2 -10.2 PBT after E xceptional Items 664.0 851.9 916.2 1,089.4 CF from Financing activities -128.6 -163.4 -180.5 -216.8 Total Tax 196.3 230.3 233.6 261.5 PAT before MI 467.7 621.5 682.6 828.0 Net Cash Flow 104.7 59.6 79.8 181.0 PAT 467.7 621.5 682.6 828.0 Cash and Cash E quivalent 100.5 205.3 264.8 344.6 G rowth (% ) 21.6 32.9 9.8 21.3 C ash 205.3 264.8 344.6 525.6 EPS (Adjusted) 53.4 70.3 77.3 93.7 Free Cash Flow 227.7 346.9 459.2 596.8 Source: ICICI Direct Research Source: ICICI Direct Research
Exhibit 21: Balance Sheet (| crore) Exhibit 22: Key Ratios (| crore) (Year-end March) F Y20 F Y21E F Y22E F Y23E (Year-end March) F Y20 F Y21E F Y22E F Y23E Per share data (|) E quity Capital 17.5 17.5 17.5 17.5 Reported EPS 52.9 70.3 77.3 93.7 Reserve and Surplus 2,581.3 3,047.7 3,560.0 4,181.3 C ash E P S 51.0 66.2 72.7 87.8 Total Shareholders funds 2,598.9 3,065.3 3,577.5 4,198.9 BV per share 294.2 346.9 404.9 475.3 Total Debt 45.7 45.7 45.7 45.7 Cash per Share 23.2 30.0 39.0 59.5 Deferred Tax Liability 81.2 82.8 84.4 86.1 Dividend per share 13.2 17.6 19.3 23.4 Long-Term Provisions 15.7 16.0 16.3 16.6 Operating Ratios (%) Other Non Current Liabilities 16.1 16.4 16.8 17.1 Gross Profit Margins 74.7 77.2 76.5 77.0 S ource of F unds 2,757.5 3,226.1 3,740.7 4,364.4 E BITDA margins 26.4 33.1 31.0 32.0 PAT Margins 18.2 21.7 20.9 22.5 Gross Block - Fixed Assets 1,976.2 2,171.2 2,371.2 2,571.2 Cash Conversion Cycle 128.2 139.1 149.1 159.1 Accumulated Depreciation 504.0 622.1 752.5 906.7 Asset Turnover 1.3 1.3 1.4 1.4 Net B lock 1,472.1 1,549.1 1,618.7 1,664.4 E BITDA conversion Rate 66.8 59.7 57.8 61.2 Capital WIP 131.9 156.9 81.9 6.9 Return Ratios (%) Fixed Assets 1,604.0 1,705.9 1,700.5 1,671.3 R oE 18.1 20.3 19.1 19.7 Investments 79.4 204.4 404.4 604.4 R oC E 24.7 26.7 24.8 25.2 Other non-Current Assets 60.7 61.9 63.2 64.4 R oIC 25.0 31.8 30.1 31.6 Inventory 495.7 686.3 826.3 983.3 Valuation Ratios (x) Debtors 775.3 719.4 864.1 1,025.9 P /E 34.6 26.0 23.7 19.5 Other Current Assets 98.3 100.3 102.3 104.4 EV / EBITDA 23.3 16.6 15.3 12.8 C ash 205.3 264.8 344.6 525.6 EV / Net Sales 6.2 5.5 4.7 4.1 Total Current Assets 1,574.6 1,770.8 2,137.3 2,639.2 Market Cap / Sales 6.2 5.6 5.0 4.4 C reditors 362.3 314.1 357.8 403.9 Price to Book Value 6.2 5.3 4.5 3.8 P rovisions 9.2 9.3 9.5 9.7 Solvency Ratios Other Current Liabilities 189.7 193.5 197.4 201.3 Debt / EBITDA 0.1 0.0 0.0 0.0 Total Current Liabilities 561.2 517.0 564.7 615.0 Debt / E quity 0.0 0.0 0.0 0.0 Net Current Assets 1,013.3 1,253.9 1,572.6 2,024.3 Current Ratio 2.4 2.9 3.2 3.4 Application of F unds 2,757.5 3,226.1 3,740.7 4,364.4 Source: ICICI Direct Research Source: ICICI Direct Research
ICICI Securities | Retail Research 8 Result Update | Ajanta Pharmaceuticals ICICI Direct Research
Exhibit 23: ICICI Direct coverage Universe (Healthcare) (| crore) Com pany I-Direct CMP TPRating M Cap EP S (|) P E(x) RoCE (%) RoE (%) C ode (|) (|) (| cr) F Y 19 F Y 20F Y 21EF Y 22E F Y 19 F Y 20 F Y 21EF Y 22E F Y 19F Y 20F Y 21EF Y 22E F Y 19 F Y 20F Y 21EF Y 22E Ajanta Pharma AJAP HA 1829 2,250 B uy 15961 43.5 53.4 70.3 77.3 42.0 34.3 26.0 23.7 21.8 24.7 26.7 24.8 17.1 18.1 20.3 19.1 Alembic PharmaALEMPHA 973 1,055 Hold 19128 30.2 44.4 57.5 43.9 32.3 21.9 16.9 22.2 19.6 21.0 23.9 17.0 21.8 27.1 23.0 15.5 Apollo HospitalsAPOHOS 2749 2,310 Hold 39524 16.2 22.3 -1.6 36.1 169.3 123.1 NA 76.2 8.8 10.2 4.9 13.0 7.1 9.7 -0.5 10.0 Aurobindo PharmaAURPHA 939 1,025 B uy 55020 41.9 48.8 55.1 61.7 22.4 19.3 17.1 15.2 15.9 17.2 17.9 17.3 17.7 17.0 14.3 13.9 B iocon B IO C O N 400 450 Hold 48048 6.2 5.8 6.5 13.9 64.5 68.8 61.5 28.8 10.9 10.2 9.2 16.5 12.2 10.4 10.5 18.7 Cadila HealthcareCADHEA 477 555 B uy 48807 18.1 14.0 20.1 22.0 26.4 34.1 23.7 21.7 12.8 10.7 13.7 14.2 17.8 13.8 15.9 15.3 C ipla C IP LA 855 975 B uy 68916 18.6 19.2 31.0 32.4 46.0 44.5 27.6 26.4 10.9 12.0 17.0 16.1 10.0 9.8 14.0 13.1 Divi's Lab DIV LAB 3645 4,425 B uy 96765 51.0 51.9 74.1 89.8 71.5 70.3 49.2 40.6 25.5 23.9 28.8 28.6 19.4 18.8 22.5 22.3 Dr Reddy's LabsDRREDD 4670 5,525 B uy 77657 114.6 121.8 87.0 188.6 40.7 38.3 53.6 24.8 10.7 9.6 15.7 19.5 13.6 13.0 8.6 16.0 Glenmark PharmaGLEPHA 502 635 B uy 14159 26.9 26.4 36.5 37.6 18.6 19.0 13.7 13.4 15.3 12.7 14.9 14.1 13.5 12.2 14.5 13.1 Hikal HIK C HE 182 230 B uy 2247 8.4 8.1 10.2 12.2 21.8 22.5 17.9 14.9 14.3 12.8 13.6 14.9 13.6 12.2 13.5 14.2 Ipca Laboratories IP C LAB 1922 2,665 B uy 24378 34.9 47.6 93.5 89.8 55.1 40.4 20.5 21.4 15.0 17.6 27.3 21.8 14.2 16.6 24.8 19.3 Jubilant Life JUB LIF 944 850 B uy 15039 54.9 59.9 54.4 70.3 17.2 15.8 17.4 13.4 14.3 14.4 14.7 16.9 17.8 16.6 13.2 14.7 Lupin LUP IN 1043 1,165 B uy 47310 16.5 -12.7 24.5 37.3 63.0 NA 42.7 28.0 9.4 9.7 8.9 12.2 5.4 -4.6 8.2 11.2 Narayana HrudalayaNARHRU 461 405 B uy 9414 2.9 6.4 -4.2 8.3 158.7 72.5 NA 55.3 7.7 11.0 -2.4 12.8 5.5 11.4 -8.3 14.2 Natco Pharma NATPHA 893 885 Hold 16279 35.4 25.3 32.7 28.0 25.3 35.3 27.3 31.9 21.3 14.0 17.1 13.6 18.5 12.2 14.0 11.0 S un P harma SUNPHA 631 675 B uy 151334 15.9 16.8 28.7 23.5 39.8 37.6 22.0 26.8 10.3 10.0 12.9 12.3 9.2 8.9 14.3 10.6 Syngene Int. S Y NINT 573 700 B uy 22920 8.3 10.3 9.7 13.2 69.3 55.6 59.1 43.4 14.8 14.5 12.6 15.8 16.8 15.7 15.1 17.1 Torrent Pharma TORPHA 2615 3,135 B uy 44252 48.9 60.6 70.6 85.8 53.4 43.2 37.0 30.5 14.2 15.4 17.9 20.2 17.5 21.2 20.9 21.3 S halby S HALIM 115 130 Hold 1246 2.9 2.6 4.7 4.9 39.4 45.2 24.5 23.5 6.8 7.2 6.6 7.9 4.1 3.5 6.0 5.9 Aster DM ASTDM 157 170 B uy 7817 6.7 5.5 3.1 9.9 23.5 28.3 50.4 15.7 8.3 7.1 5.2 9.1 10.4 8.5 4.5 12.7 Indoco RemediesINDR E M 307 380 B uy 2831 -0.3 2.6 9.3 14.8 NA 117.4 33.1 20.7 0.9 4.6 11.4 15.6 -0.4 3.5 11.4 15.7 Caplin Point CAPPOI 477 605 B uy 3610 23.3 28.4 33.5 43.5 20.4 16.8 14.2 11.0 34.6 26.5 26.9 28.1 27.9 22.7 21.5 22.3 Granules India GRANUL 333 460 B uy 8255 9.5 12.4 21.1 23.6 34.9 26.8 15.8 14.1 11.8 15.2 22.4 22.0 15.5 16.7 22.4 20.2 Laurus Labs LAULAB 350 440 B uy 18794 1.7 4.8 17.9 21.1 200.4 73.6 19.6 16.6 7.7 13.0 33.8 31.6 6.0 14.4 36.4 31.0 Source: ICICI Direct Research, Bloomberg
ICICI Securities | Retail Research 9 Result Update | Ajanta Pharmaceuticals ICICI Direct Research
RATING RATIONALE ICICI Direct endeavours to provide objective opinions and recommendations. ICICI Direct assigns ratings to its stocks according to their notional target price vs. current market price and then categorises them as Buy, Hold, Reduce and Sell. The performance horizon is two years unless specified and the notional target price is defined as the analysts' valuation for a stock
Buy: >15%; Hold: -5% to 15%; Reduce: -5% to -15%; Sell: <-15%
Pankaj Pandey Head – Research [email protected]
ICICI Direct Research Desk, ICICI Securities Limited, 1st Floor, Akruti Trade Centre, Road No 7, MIDC, Andheri (East) Mumbai – 400 093 [email protected]
ICICI Securities | Retail Research 10 Result Update | Ajanta Pharmaceuticals ICICI Direct Research
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