The Hindu Business Line : Dishman turns volatile

THE stock of Dishman Pharmaceuticals and Chemicals (Dishman) had a volatile day at the bourses after the announcement of its acquisition of UK-based Synprotec. The company announced this Rs 14.4-crore (GBP 1.7 million) acquisition to the stock exchanges on Thursday.

The share movement was fairly volatile on Thursday with closing prices on the BSE and the NSE moving in opposite directions. On the BSE, the stock shed 3.27 per cent to close at Rs. 639.50, incurring a loss of Rs 21.65. On the NSE, the share ended with a gain of 1.13 per cent at Rs 662.15. It touched an intra-day high of Rs 709 on the BSE. However, volumes traded were not very high. The stock had registered high volumes during the run-up to the final announcement about the acquisition.

Synprotec offers confidential custom synthesis to leading multinational pharmaceutical companies. Analysts see this acquisition as lending a lot of strength to Dishman's business model.

With the addition of Synprotec, Dishman is expected to have access to larger clients, especially leading multinational companies. These relationships can be used for the company's other businesses as well.

While a large part of the work at the UK centre would be transferred to the Indian facility of the company, the existing team at Synprotec will be retained, according to the company. This team would then be utilised for the company's new projects, probably for those at higher ends of the value chain.

Analysts see the acquisition as the pivot around which the expansion of the client base of the company to Europe and US will hinge on. They feel that Dishman will be able to scale up its existing projects, as well.

Currently, Synprotec has over 30 projects in hand in the area of pharmaceuticals and speciality chemicals, according to analysts' reports. The company is currently associated with 10 internationally reputed pharmaceutical companies including Glaxo SmithKline, Merck, Pfizer, Novartis, Aventis and Astra Zeneca.

Brokerages are bullish on the stock on the back of Thursday's announcement.

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