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Dishman Pharmaceuticals and Chemicals: Buy

[Source - The Hindu Business Line] Investors with a long-term perspective can consider adding the stock of Dishman Pharmaceuticals and Chemicals to their portfolio. An established player in the contract research and manufacturing services (CRAMS) space, Dishman appears well-placed to benefit from the forced austerity drives of the global pharma majors. Driven by receding product lines, fewer blockbuster launches and patent expiries, global pharma companies are looking at ways to contain costs. When seen in this light, contracting research and manufacturing services to low-cost providers helps combat earnings slippages. Strengthening demand apart, what also builds the case in favour of Dishman is its wide client network, falling dependence on Solvay for revenues and relatively cheap valuations. At the current market price of Rs 228, the stock trades at about 11 times its likely FY-10 per share earnings. Not only does this leave sufficient room for growth, it also compares fa...

Investment Ideas

The Hindu Business Line Dishman Pharma: Buy Investors with two-year perspective can consider an investment in Dishman Pharmaceuticals and Chemicals, a leading contract research and manufacturing services (CRAMS) player catering exclusively to innovator companies. The company has high earnings visibility from long-term contracts for supply of pharmaceutical ingredients. Furthermore, inorganic growth through overseas acquisitions will add to Dishman’s revenues as it keeps looking for opportunities. Given its capabilities in manufacturing constituents of patented molecules, key intermediates and Vitamin D, Dishman is well-placed to capture a larger share in the innovator contracts space. Dishman’s sales could easily clock a compounded annual growth rate of over 30 per cent over the next two-three years and maintain operating margins of 21 per cent. At the current price of Rs 275, the stock discounts its FY-09 earnings per share 14 times, which is cheap compared to the sector leader, Divi...

Great Stocks for 2008

Twenty stocks for 2008 (Business Standard 31st Dec 2007) Adlabs Films Bank of Baroda Bharat Bijlee Bharati Shipyard BHEL Bharti Airtel Blue Star Dishman Pharmaceuticals Educomp Solutions HDFC India Infoline Jain Irrigation Jindal Saw Larsen & Toubro Maruti Suzuki ONGC Patel Engineering Reliance Communications Reliance Industries State Bank of India More