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SVS Securities Private ate Ltd.
Volume No. I Issue No. 19 July 16, 2010
Ajanta Pharma
Rs 220
Healthy growth
FINANCIAL SUMMARY
Sensex: 17,956 Nifty: 5,394
SALES OPM OP OI. PBIDT INTEREST PBDT DEP. PBT TOTAL PAT EPS
(%) TAX (RS)*
1103 (12P) 481.1 19.3 92.85 2.76 95.62 18.14 77.47 25.92 51.56 7.73 43.82 37.2
1003 (12) 407.71 18.9 77.14 2.51 79.65 20.16 59.49 20.73 38.76 4.76 34 28.8
0903 (12) 349.34 18.6 65.07 2.5 67.56 23.55 44.01 14.2 29.81 4.38 25.43 21.6
0803 (12) 309.37 16.6 51.35 1.54 52.89 16.14 36.75 7.87 28.88 6.85 22.03 18.7
0703 (12) 258.01 15.4 39.68 0.81 40.49 12.38 28.11 8.74 19.37 4.67 14.7 12.5
* On current equity of Rs 11.86 crore. Face Value: Rs 10. (P): Projections. Figures in Rs crore. Source: Capitaline Corporate Databases
Ajanta Pharma is a specialty pharmaceutical company engaged in the development,
manufacture and commercialization of pharmaceutical products. It employs over 2,500
people worldwide and its products are sold in over 25 countries.
The company develops and commercializes a diverse range of scientifically and medically
innovative generic products. It is amongst the front runners in the segments of Cardiology,
Dermatology Ophthalmology, and Anti-Malarial. Many of its brands hold leading positions
in their respective sub-therapeutic segments. Ajanta Pharma is also expanding our presence
in the fields of Respiratory, Gastrointestinal and Musculoskeletal medicine by introducing
innovative products in these segments. A clear therapeutic focus has lead to a strong
product portfolio for the company.
Ajanta Pharma is a fully-integrated pharmaceutical company with headquarters in Mumbai,
India. It has an advanced Research & Development Centre for API synthesis and finished
formulations of different dosage forms. Its focus on specialty segments in India and
simultaneous entry in to new international markets have been the key growth drivers for
over the years.
It is also engaged in contract research for leading multinational pharmaceutical companies
to expand its revenue base.
Modern manufacturing facilities
Ajanta Pharma operates 5 state-of-the-art manufacturing facilities; 4 within India and 1 in
Mauritius. One of these, located at Paithan, India is approved by the US FDA, health authorities
of Brazil and Colombia and also holds a WHO pre-qualification for one of its products.
These modern manufacturing sites provide the company with a high level of flexibility, thus
ensuring efficient and timely delivery of products to patients and clinicians worldwide. Its
manufacturing capabilities include a comprehensive range of dosage formulations of
allopathic drugs including tablets, capsules, ointments, injections and powders.
To cater to the growing marketing needs, the company is in the process of expanding its
manufacturing scope with more facilities and capacity enhancements in the existing plants.
Enhancing global presence
The company started its overseas expansion in the late 90’s and now its products are sold
in over 25 countries through an established presence across Africa, Asia, Latin America and
The CIS. Ajanta Pharma is now in the process of formulating products to be able to file
product dossiers in the regulated markets.
STOCK DATA
BSE Code : 532331
BSE Group : B
NSE Code : AJANTPHARM
Bloomberg : AJP IN
Reuters : AJPH.BO
52-week High/Low : Rs 230 / Rs 78
Sector : Pharmaceuticals
SHAREHOLDING PATTERN*
Category
% of equity
Total Foreign : 0.30
Total Institutions : 2.17
Total Non Promoter
Corporate Holding : 6.82
Total Promoters : 66.82
Total Public & Others : 23.89
Totals : 100
* as on 30 th June 2010
Source: Capitaline Corporate Database

SVS Securities Private Ltd.
Ajanta has established a strong marketing set-up that is supplemented by a wide
distribution network in many international markets. All activities are centered on
establishing its brands in respective markets for sustained sales.
Strong R&D base
R&D is the first & foremost important component in the pharma value chain. Recognising
this, Ajanta Pharma has been consistently investing in R&D. Its constant initiatives are
in the direction of targeting, both identified market opportunities and challenge of
unmet medical needs which enables it to work on difficult to make products, in existing
as well as high potential new therapy areas.
The company continues to focus on New Drug Delivery Systems (NDDS) and new
combinations. With the help of its R&D capabilities, it now has 1380 product
registrations in different markets of the world and over 1029 more are waiting in
pipeline. Its R&D facility at ‘Advent’, Mumbai, which is approved by Department of
Scientific and Industrial Research (DSIR), Ministry of Science & Technology, Government
of India, is being expanded which will ensure consistent growth for the organisation in
the coming years.
Its R&D facility Advent has more than 150 diligent and committed scientists. Advent,
located in Mumbai, houses a range of state-of -the-art equipment for formulation
development, working on different dosage forms ranging from topical creams,
ophthalmological preparations, nasal sprays and dry powder inhalers to name a few. It
has an equally well equipped API lab at Advent to synthesize high value APIs for some
of its key products.
Few of its notable R&D achievements are in the segment of anti-malarial with flagship
brand, ARTEFAN; the first generic product to have been pre-qualified by the World
Health Organization (WHO), Geneva. Its other key brands include KAMAGRA (Sildenafil
Citrate) & APCALIS-SX (Tadalafil), both used in the treatment of Male Erectile Dysfunction.
These are available in the conventional tablet as well as in an innovative “jelly” form
which is the world’s first of its kind dosage form for this molecule.
Strong API player
Another key component of pharma value chain is manufacturing of critical raw material,
commonly known as Active Pharma Ingredient (API). Whenever a new formulation
needs to be launched, it has to start from its basic compound, which during initial
period, is not easily available in the market place. It is here that, in-house capability for
producing such API becomes essential to reach the formulation to the needy patients
at the earliest. Further, it also helps to reduce costs by process improvement, thereby
improving profitability.
Realising its need and importance in the pharma value chain, Ajanta Pharma has recently
set up a state-of-the-art API facility at Waluj, Aurangabad. This plant is equipped to
produce different scale of volumes right from laboratory to pilot to commercial level.
This enables the company to carry out innovations in both product quality and cost.
With this addition, it has mapped the complete pharma value chain. Addition of this
component of pharma value chain will accelerate the company’s growth in the coming
years.
Impressive standalone performance; sales up 19% and PAT rise 33%
For the FY 2010 Ajanta Pharma registered a strong 19% rise in standalone sales to Rs
381.67 crore. As OPM remained unchanged at 18.7% OP also grew 19% to Rs 71.22
crore.
Other income fell 7% to Rs 1.27 crore and interest cost fell 13% to Rs 19.08 crore. Even
as depreciation shot 50% to Rs 19.76 crore, PBT grew 30% to Rs 33.66 crore. As
The company continues to
focus on New Drug Delivery
Systems (NDDS) and new
combinations. With the help
of its R&D capabilities, it now
has 1380 product
registrations in different
markets of the world and
over 1029 more are waiting in
pipeline
On standalone basis, over the
last 5 years (from FY 2005 to
FY 2010) Ajanta Pharma has
registered 17% Compounded
Annual Growth Rate (CAGR)
in it sales. Net profit during
the same period grew at a
CAGR of 31%
July 16, 2010
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SVS Securities Private Ltd.
taxation rose 12% to Rs 5.12 crore, net profit shot up 33% to Rs 28.54 crore.
Consolidated yearly performance is higher and much better
In FY 2010 on a consolidated basis Ajanta Pharma registered a 17% rise in its sales to Rs
407.71 crore. As OPM improved by 30 basis points to 18.9% OP grew 19% to Rs 77.14
crore. Other income rose 1% to Rs 2.51 crore and interest cost fell 14% to Rs 20.16 crore.
Even as depreciation jumped 46% to Rs 20.73 crore, PBT grew 30% to Rs 38.76 crore. As
taxation rose just 9% to Rs 4.76 crore, net profit shot up 34% to Rs 34.00 crore.
Consolidated EPS is higher than standalone EPS
In FY 2010 the company registered consolidated EPS of Rs 28.8 against standalone
EPS of Rs 24.2.
Impressive CAGR
On standalone basis, over the last 5 years (from FY 2005 to FY 2010) Ajanta Pharma has
registered 17% Compounded Annual Growth Rate (CAGR) in it sales. Net profit during
the same period grew at a CAGR of 31%.
On consolidated basis, over the last 5 years (from FY 2005 to FY 2010) Ajanta Pharma has
registered 15.1% CAGR in it sales. Net profit during the same period grew at a CAGR of 28%.
Appealing valuation; while standalone P/E is 6.3, consolidated P/E is just 5.5
On standalone basis, in FY 2011 we expect the company to register sales of Rs 456
crore and net profit of Rs 38.59 crore. On an equity of Rs 11.86 crore (66.82% held by
the promoters) and face value of Rs 10 per share, standalone EPS works out to Rs 32.7.
In FY 2011 on consolidated basis, we expect the company to register sales of Rs 481.10
crore and net profit of Rs 43.82 crore. Thus consolidated EPS works out to Rs 37.2.
Currently its consolidated book value stands at Rs 156, whish is likely to touch Rs 190
mark by end of FY 2011.
The share price trades at Rs 220. While the P/E on standalone EPS (of Rs 32.7) works
out to 6.7, it falls to just 5.9 on our consolidated projected EPS (of Rs 37.2) for FY 2011.
This formulation company
has grown consistently over
the years and prospects
remain encouraging
AJANTA PHARMA: STANDALONE FINANCIALS
0703(12) 0803(12) 0903(12) 1003(12) 1103(P)
Sales 238.69 285.13 319.48 381.67 458.00
OPM (%) 15.1 16.1 18.7 18.7 18.7
OP 36.08 45.93 59.74 71.22 85.87
Other inc. 0.63 0.77 1.38 1.27 1.40
PBIDT 36.71 46.70 61.12 72.50 87.27
Interest 11.56 15.09 22.03 19.08 17.17
PBDT 25.15 31.61 39.09 53.42 70.10
Dep. 6.78 6.97 13.15 19.76 24.69
PBT 18.37 24.64 25.94 33.66 45.40
Total Tax 4.66 6.85 4.56 5.12 6.81
PAT 13.71 17.79 21.38 28.54 38.59
EPS (Rs)* 11.6 15.1 18.1 24.2 32.7
* On current equity of Rs 11.86 crore. Face Value: Rs 10. (P): Projections.
Figures in Rs crore. Source: Capitaline Corporate Databases
AJANTA PHARMA: STANDALONE RESULTS
1003(3) 0903(3) VAR.(%) 1003(12) 0903(12) VAR.(%)
Sales 107.89 89.40 21 381.67 319.48 19
OPM (%) 19.4 21.3 18.7 18.7
OP 20.93 19.02 10 71.22 59.74 19
Other inc. 0.63 0.08 661 1.27 1.38 -7
PBIDT 21.56 19.10 13 72.50 61.12 19
Interest 3.85 6.13 -37 19.08 22.03 -13
PBDT 17.71 12.97 37 53.42 39.09 37
Dep. 6.17 3.65 69 19.76 13.15 50
PBT 11.54 9.33 24 33.66 25.94 30
Total Tax 1.50 0.02 9144 5.12 4.56 12
PAT 10.04 9.31 8 28.54 21.38 33
EPS (Rs)* 34.0 31.6 24.2 18.1
* On current equity of Rs 11.86 crore. Face Value: Rs 10. (P): Projections.
Figures in Rs crore. Source: Capitaline Corporate Databases
July 16, 2010
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July 16, 2010
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