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Marksans Pharma
Product Overview....4
Marksans R&D.....8
Industry Outlook10
Company Financial.....13
Balance Sheet......14
Cash Flow.....15
Key Ratios....15
Peer Comparison......16
Shareholding Pattern....... 18
Investment Rationale..............19
Disclaimer20
Gastroenterology
Face Value (Rs.) 1
52 Week High (Rs.) 113.90 (28-Dec-
Antidiabetic, Antibiotics 15)
Cardiovascular 52 Week Low (Rs.) 33.50 (01-Mar-16)
Pain Management
Life Time high (Rs.) 115.00 (10-Aug-
15)
Gynaecology Life Time low (Rs.) 0.87 (28-May-03)
Average Daily Movement 3.25
Marksans R&D capabilities include dossier development, chemical synthesis,
Average Volume [20 days] 5506566
process optimization, formulation development, analytical development and
1 Month Return (%) 31.7
conducting stability studies. The company has a team of over 50 experienced
scientists specializing in formulation development and analytical development. Consolidated Trailing PE 45.77
Ratio
The conpany has possessed end-to-end capabilities from Lab scale Book Value 10.79
development to Pilot scale up and from commercializing the product for large Market Cap 2202.11 (Cr)
scale manufacturing to marketing globally. % of Promoter holding 0
pledged
The company has achieved global recognition within a very short span of time
and has major global expansion plans for the near future.
This is a weekly chart of Marksans Pharma
showing the stock has gain momentum from
40 levels and giving breakout of 53 levels.
The table is showing NSE Index performance sorted on 1 Month
percentage change
1Year
# Symbol 1Month% 3Months% 6Months%
%
1 NIFTY AUTO INDEX 4.32 15.68 27.16 32.27
2 NIFTY PHARMA 3.47 6.25 10.43 -7.26
INDEX
3 NIFTY MEDIA INDEX 2.95 16.68 31.68 27.46
4 NIFTY FINANCE 2.41 12.18 25.64 14.97
INDEX
5 BANK NIFTY 2.27 11.10 25.45 13.73
6 NIFTY ENERGY 2.23 13.87 18.02 31.30
INDEX
7 NIFTY REALTY INDEX 1.72 7.34 40.01 19.71
8 NIFTY 1.60 6.60 15.11 11.50
9 NIFTY METAL INDEX -0.03 20.39 38.63 60.64
10 NIFTY IT INDEX -0.24 -6.30 -6.79 -12.67
11 NIFTY FMCG INDEX -1.24 2.41 13.12 12.55
Marksans aims to penetrate the Latin American market with its high
quality products and extensive product portfolio. Strong economic
performance in this region is expected to fuel growth in the coming
years. In addition, recent regulatory developments will create further
market opportunities in the country, particularly for generic producers
in both the private and public sectors.
Areas of Operations
In Ecuador, the pharmaceutical industry is expected to perform well in Ecuador
the coming years, with strong growth in production, sales, exports and Jamaica
employment. Pharmaceutical companies, however, are encouraged to
Nicaragua
act in smaller Latin American markets to maximize their full regional
sales potential. Central America
South America
Generics consumption in Latin America is high. Marksans Pharma is
Caribbean Islands
currently operating in Central America, South America & Caribbean
Islands with 15 products registered and 70 products are submitted to
MOH (Ministry of Health).
Australasia
Areas of Operations
Marksans has gained a foothold in the prestigious Australasia markets
Analgesics
through its acquisition of Nova Pharmaceuticals Australasia Pty Ltd. in
2005. They are now a prominent distributor to popular retail brands in Anti allergy
the region. Antibacterial
Antibiotic
Through Nova, Marksans now holds 30 MAs and has become one of the
biggest suppliers of generic products here. They continue to grow Antiulceratives
rapidly and expand into key therapeutic classes. They are leveraging Hypertension
this opportunity and reaching out to the New Zealand pharmaceutical
market as well.
The entire facility has been built to adhere to the US FDA guidelines
and has been approved by various international bodies such as US FDA,
UK MHRA, Australian TGA and ANVISA (Brazil). The facility houses
a pilot manufacturing plant and has also received recognition from the
Department of Scientific and Industrial Research (DISR).
OUT-LICENSING IN INDIA
STATISTICS
FDI POLICY
The countrys pharmaceuticals industry is expected to account
for about 3.1-3.6% of the global pharma industry by value and 100% Foreign Direct Investment
currently accounts for 10% by volume, by 2016. (FDI) is allowed under the automatic
Industry revenues are expected to expand at a CAGR of 12.1% route for Greenfield projects.
during 2012-20 and reach USD 45 Billion. For brownfield project investments,
The healthcare sector in India is expected to grow to USD 250 up to 100% FDI is permitted under
Billion by 2020 from USD 65 Billion currently. the government route.
The generics market is expected to grow to USD 26.1 Billion by The government may incorporate
2016 from USD 11.3 Billion in 2011. appropriate conditions for FDI in
brownfield cases, at the time of
GROWTH DRIVERS granting approvals.
Non-compete clauses are not
Between 2011 and 2016, patent drugs worth USD 255 Billion
allowed except in special
are estimated to go off-patent leading to a huge surge in generic
circumstances, with the approval of
product and tremendous opportunities for companies.
the Foreign Investment Promotion
By 2020, it will grow to USD 11 billion - a CAGR of 18%, with
Board.
the potential to reach USD 13 billion - at an aggresive CAGR of
The FDI is subject to applicable
20%.
regulations and laws.
With increasing penetration of chemists, especially in rural
India, OTC drugs will be readily available.
Pharma companies have increased spending to tap rural markets
and develop better infrastructure. The market share of hospitals
is expected to increase from 13.1% in 2009 to 26% in 2020.
R&D BENEFITS:
FOREIGN INVESTORS
Industry/private sponsored research programmes:
Teva Pharmaceuticals (Israel)
A weighted tax deduction is given under section 35 Nipro Corporation (Japan)
(2AA) of the Income Tax Act. Procter & Gamble (USA)
A weighted deduction of 200% is granted to assess for Pfizer (USA)
any sum paid to a national laboratory, university or Glaxo Smith Kline (UK)
institute of technology, or specified persons with a Johnson & Johnson (USA)
specific direction provided that the said sum is used for Otsuka Pharmaceutical (Japan)
scientific research within a programme approved by the AstraZeneca (Sweden-UK)
prescribed authority.
Total Income From Operations 186.76 216.68 217.51 255.54 212.46 902.19
Increase/Decrease in Stocks -16.50 1.59 1.99 3.03 -1.77 4.84
Consumption of Raw Materials 91.32 96.40 75.20 96.70 72.97 341.27
Purchase of Traded Goods 34.97 46.78 33.89 36.58 46.33 163.58
Employees Cost 38.26 31.11 36.54 36.53 18.24 122.42
Depreciation 4.82 8.36 9.76 5.48 4.52 28.13
Other Expenses 30.44 30.04 39.30 31.33 24.28 124.95
Companys revenue has fallen by 11.16% QoQ from Rs. 210.23 crs to Rs. 186.75 crs.
Companys total expenditure has gone down drastically from Rs. 214.28 crs to Rs. 183.31 crs almost
14.45%.
Company has lower down its interest outgo.
From loss company has posted positive result. From Rs. -5.76 crs to Rs. 1.02 this can be turnaround
for the company.
Balance sheet
Ratio Analysis
INSTRUMENT Price Avg. Volume Market Cap (Rs. in Cr) % FII Holding
AJANTA PHARMA 2074.90 157848 18260 9.87
BLISS GVS 148.45 266067 1531 4.25
DISHMAN 237.75 2444623 3837 13.47
FDC 222.60 186156 3959 0.00
GRANULES 122.80 1408629 2666 7.15
HIKAL 205.35 103960 1688 3.94
INDOCO REMEDIES 330.30 139679 3044 12.35
JB CHEMICALS 371.95 301048 3155 4.91
MARKSANS PHARMA 54.85 5889339 2245 0.00
MOREPEN LAB 26.15 2848590 1176 0.00
NATCO PHARMA 619.75 177783 10794 12.75
NEULAND LAB 1002.40 18853 890 2.66
SHILPA MEDICARE 559.40 44833 4313 13.74
SUVEN 206.30 415372 Peer comparison on
2626 2.01
SYNGENE 487.70 154434 9754 4.52
INSTRUMENT Price % Pledged Debt Equity Ratio (X) Int. Coverage Ratio (X)
AJANTA PHARMA 2074.9 5.04 0.06 122.16
BLISS GVS 148.45 0.00 0.24 9.87
DISHMAN 237.75 0.57 0.58 4.63
FDC 222.60 0.00 0.00 176.21
GRANULES 122.80 26.99 0.63 7.12
HIKAL 205.35 0.00 1.02 2.94
INDOCO REMEDIES 330.3 0.01 0.22 13.87
JB CHEMICALS 371.95 0.00 0.18 27.12
MARKSANS PHARMA 54.85 0.00 0.23 14.29
MOREPEN LAB 26.15 0.39 0.90 5.98
NATCO PHARMA 619.75 0.00 0.08 12.25
NEULAND LAB 1002.4 4.36 0.91 3.36
SHILPA MEDICARE 559.40 0.00 0.29 32.95
SUVEN 206.30 0.00 0.11 21.10
SYNGENE 487.70 0.00 0.85 43.32
Marksan Pharma has low debt to equity ratio, therefore company has good leverage
position.
INSTRUMENT Price P/E Ratio (X) PAT JUN' 16 PAT MAR' 16 PAT DEC' 15 PAT JUN' 15
AJANTA PHARMA 2074.90 42 119.55 106.31 111.30 83.84
BLISS GVS 148.45 24 27.44 13.31 21.37 19.97
DISHMAN 237.75 21 45.51 49.81 46.93 37.76
FDC 222.60 24 48.97 38.25 28.77 43.72
GRANULES 122.80 20 31.87 33.19 27.15 27.15
HIKAL 205.35 34 10.96 22.24 12.41 1.83
INDOCO REMEDIES 330.30 37 19.79 20.01 20.42 20.27
JB CHEMICALS 371.95 16 49.86 43.23 49.89 34.28
MARKSANS PHARMA 54.85 42 1.87 -3.95 18.66 32.34
MOREPEN LAB 26.15 68 4.01 2.77 7.28 2.50
NATCO PHARMA 619.75 62 47.43 60.45 36.67 27.54
NEULAND LAB 1002.40 31 9.71 6.63 6.28 7.30
SHILPA MEDICARE 559.40 41 24.14 38.03 24.88 15.76
SUVEN 206.30 24 32.58 32.29 17.72 20.23
SYNGENE 487.70 41 59.80 66.50 58.80 43.60
Shareholding Pattern
Because of low profitabity Marksans is trading at High PE but it will get better with increasing
profitability in future
Category & Name of the Shareholders No. of shareholder Total no. shares held % Holding
Website
http://www.marksanspharma.com Investment Rationale
Marksans Pharma Ltd. received an approval from the U.S. health regulator for an Abbreviated New Drug
Application (ANDA) for Loratadine Liquid Filled Capsules 10 mg on 25th Sep 2016.
Marksans R&D capabilities include dossier development, chemical synthesis, process optimization,
formulation development, analytical development and conducting stability studies.
Marksans have a team of over 50 experienced scientists specializing in formulation development and
analytical development.
The company has achieved global recognition within a very short span of time and has major global
expansion plans for the near future.
Companies key focus areas lie in the OTC & prescription drugs that have wide-ranging applications
across fields like Oncology, Gastroenterology, Antidiabetic, Antibiotics, Cardiovascular, Pain
Management, Gynaecology, among others.
Marksans Pharmas premier manufacturing and R&D facility is located at Goa, India. The formulation
plant is spread across an 18,000 square feet campus. The plant is a 100% EOU has been designed to
accommodate rapid future expansion.
Companys total expenditure has gone down drastically from Rs. 214.28 crs to Rs. 183.31 crs almost
14.45%.
Company has lower down its interest outgo.
From loss company has posted positive result. From Rs. -5.76 crs to Rs. 1.02 this can be turnaround for
the company.
Total 104 institutions hold position in Marksans with total holding of 13.65%
Marksans Pharma has fallen from Rs. 113.90 in Dec 2015 and came down to Rs. 33.50 in March 2016
after company failed to clear an inspection by the UK drug regulator. The company got a notice of
deficiency from UK MHRA. The inspection is about to over and result is expected to come positive.
Answers to the Best of the knowledge and belief of Dynamic/ its Associates/ Research Analyst who prepared this report
DYANMIC/its Associates/ Research Analyst/ his Relative have any financial interest in the subject company? No
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public appearance? No
DYANMIC/its Associates/ Research Analyst/ his Relative have received any compensation from the subject company in the past twelve months? No
DYANMIC/its Associates/ Research Analyst/ his Relative have managed or co-managed public offering of securities for the subject company in the past twelve months?
No
DYANMIC/its Associates/ Research Analyst/ his Relative have received any compensation for investment banking or merchant banking or brokerage services from the
subject company in the past twelve months? No
DYANMIC/its Associates/ Research Analyst/ his Relative have received any compensation for products or services other than investment banking or merchant banking
or brokerage services from the subject company in the past twelve months? No
DYANMIC/its Associates/ Research Analyst/ his Relative have received any compensation or other benefits from the Subject Company or third party in connection with
the research report? No
DYANMIC/its Associates/ Research Analyst/ his Relative have served as an officer, director or employee of the subject company? No
DYANMIC/its Associates/ Research Analyst/ his Relative have been engaged in market making activity for the subject company? No
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