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Peer group valuation Among peers, the company compares favorably. The EPS of NPIL is likely to grow at a CAGR of 42% over FY06-09E and it is trading at 17.73x FY09E EPS of Rs 17.93. A DCF valuation gives us a fair value of Rs 362. Exhibit 17: Peer group comparison EPS (Rs) P/E (x) PEG Price (Rs) Jubilant Organosys FY06 9.17 31.62 FY07 12.10 23.97 0.55 290 FY08E 16.10 18.01 Dishman Pharma FY06 6.71 41.43 FY07 10.80 25.74 0.31 278 FY08E 16.15 17.21 Divi's Lab FY06 53.94 96.96 FY07 94.40 55.40 0.69 5230 FY08E 133.06 39.31 Nicholas Piramal FY06 6.27 37.62 FY07 FY08E 10.83 13.52 21.79 17.46 0.37 237 FY09E 17.93 13.16 Source: ICICIdirect Research, Company & Consensus estimates 12 | P age
Profit and Loss Statement (Rs crore) (Year-end March) FY05 FY06 FY07 FY08E FY09E Sales 1308.18 1582.49 2420.18 2664.50 2993.87 % Growth -16.38% 20.97% 52.93% 10.09% 12.36% Op Profit 169.38 197.64 331.72 458.65 553.59 % Growth -39.69% 16.68% 67.84% 38.26% 20.70% Other Income 33.47 40.13 52.14 17.94 29.19 Depreciation 52.44 68.81 81.82 100.14 100.84 EBIT 150.41 168.96 302.04 376.45 481.93 % Growth 97.00% 12.33% 78.76% 24.64% 28.02% Interest 19.21 17.30 30.51 44.32 39.52 Profit before Tax 131.20 151.66 271.53 332.13 442.41 % Growth 0.34% 15.59% 79.04% 22.32% 33.20% Taxation 46.48 23.81 38.89 48.95 66.81 Tax as % of PBT 28.28 18.16 16.00 14.00 15.00 Net Profit before minority interest 164.34 131.12 228.33 283.18 375.60 Minority interest 0.29 0.39 0.08 0.63 0.92 Net Profit after minority interest 164.05 130.73 228.25 282.55 374.68 % Change YoY -20.31% 74.60% 23.79% 32.61% Shares O/S 20.90 20.90 20.90 20.90 20.90 EPS (Rs) 7.86 6.27 10.83 13.52 17.93 CEPS (Rs) 10.36 9.55 14.84 18.31 22.75 DPS 2.73 2.73 3.39 3.45 3.45 Balance Sheet (Rs crore) (Year-end March) FY05 FY06 FY07 FY08E FY09E Sources of Funds Share Capital 38.00 41.80 41.80 41.80 41.80 Preference capital 53.37 53.37 38.37 0.00 0.00 Reserves & Surplus 461.95 919.18 1006.03 1292.44 1602.60 Minority Interest 4.11 3.02 0.50 1.13 2.05 Secured Loans 309.53 271.79 421.63 513.47 462.41 Unsecured Loans 58.47 39.65 217.59 231.92 231.92 Deferred Tax Liability 59.60 83.59 89.32 60.00 60.00 Current Liabilities & Provisions 312.11 437.31 486.60 464.25 514.56 Liability 1297.14 1849.71 2301.84 2605.01 2915.34 Application of Funds Net Block 622.65 864.98 1170.50 1123.61 1122.77 Capital Work-in-progress 105.18 176.79 53.25 100.00 100.00 Investments 3.73 28.73 28.73 200.00 350.00 Cash 15.51 95.29 50.59 6.38 20.45 Trade Receivables 146.02 242.93 367.34 393.37 441.99 Loans & Advances 133.55 160.12 191.24 276.11 310.25 Inventory- Other 270.50 280.87 440.19 505.53 569.88 Total Asset 1297.14 1849.71 2301.84 2605.01 2915.34 13 | P age
Page 1 and 2: August 27, 2007 | Pharmaceuticals I
Page 3 and 4: INVESTMENT RATIONALE Emerging as a
Page 5 and 6: Major player in domestic market Do
Page 7 and 8: In-licensing - an opportunity to gr
Page 9 and 10: Strong margin expansion likely in e
Page 11: VALUATION We believe a robust growt
Page 15: RATING RATIONALE ICICIDirect endeav

himani.singh@icicidir ect.com Nicholas Piramal (NICPIR) Lucrative ...

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