Comments
HDFC Securities
Dishman Pharma (Buy)
CMP: ₹155.85
Target: ₹185-215
Dishman is a global outsourcing partner for the pharmaceutical industry offering a portfolio of development, scale-up and manufacturing services. Dishman is a leading contract research and manufacturing services (CRAMS) player and operates mainly under two segments — CRAMS and marketable molecules.
Triggers: a) CRAMS back on growth path; b) Turnaround of carbogen amcis led by margin improvement, new products, ADC and Unit 9-HiPo; c) CRAMS China-breakeven expected in FY15; d) Vitamin D business on track with focus on the integration of the vitamin business with the vitamin D3 facility in India; e) Leverage under control and utilisation and profitability to improve risks/ concerns; f) Vulnerable to forex fluctuation, being an export oriented player.
Increasing R&D spends can affect the company’s operating margins negatively. Under utilisation of the capacities leading to low return ratios. Debt-to-equity ratio is a bit towards higher side. Shares pledged by its promoters.
We feel investors can buy the stock at current levels and add on dips to ₹132-139 band for the target price in 2-3 quarters.
Comments
COMMENT NOW
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.