Aarti Drugs


(ranvir dehal) #62

Given the run up in most descent mid and small cap stocks in the mkt these days, Aarti Drugs looks like a reasonably undervalued bet to me.

Plus the fact that the market has temporarily stopped giving whopping valuations to pharma stocks really gets my contrarian heart go Hummmm!!!


(Mehnazfatima) #63

Finally, Aarti drugs is bullish on all the time frames…Monthly, weekly and daily…its a good time and price to buy more of Aarti drugs

Dis: I am not invested in this stock…


(Nooresh) #64

Good Insider buying seen - http://www.bseindia.com/stock-share-price/stockreach_insidertrade_new.aspx?scripcode=524348&expandable=2


(ranvir dehal) #65

Thanks Nooresh for providing the Link.
Such promoter buying are an indicator of good things to come ( At least that is usually the case )
Lets wait for q2 results. We might be in for a surprise.

Disc: Invested in both Aarti Drugs and Aarti Industries.


(ranvir dehal) #66

Huge moves seen in Aarti Drugs in last 10 days or so. Does anybody knows as to what’s brewing??


(Rohit B) #67

@ranvir could be Valiant Organics SME IPO - looks like a sister concern of Aarti, very less info on website but family name consistent in management.


(bbbhutra) #68

Continuing on my previous message, the US FDA issue is mostly likely to get sorted by Oct-Nov. Domestic market have seen good pick up in the last few months and export market will pick up too in some months.

Also the government may impose anti- dumping duty on imports of a Chinese chemical used in pharma industry and it has initiated a probe against its below-cost imports following complaints from Aarti Drugs Ltd. The Directorate General of Anti-Dumping and Allied Duties (DGAD), under the commerce ministry, has started the anti- dumping investigation concerning imports of “O-Acid” originating in or exported from China.

It said that Mumbai-based Aarti Drugs Ltd is producer of the product. There is no other known producer of product under consideration in India. Ofloxacin Acid or O-Acid is used in production of Ofloxacin, which is used to treat bronchitis, pneumonia as well as infections of the skin, bladder, urinary tract, reproductive organs and prostate.

Also the promoters have been constantly increasing stake in the company from the past few quarters. Good to stay put for the next 3-5 years. Will look to increase more exposure below 500 level during corrections.


(bbbhutra) #69

Aarti Drugs has posted impressive performance during the second quarter ended September 2016 and its consolidated net profit moved up 40.5 per cent to Rs.22.07 crore from Rs.15.71 crore in the corresponding period of last year. Lower crude prices, raw material and finished goods prices pushed net profit level. Further lower interest charges boost profit level.

Its net sales increased by 15.6 per cent to Rs.315.11 crore from Rs.272.64 crore. September quarter has shown good demand growth both in domestic as well as global markets. New facility and product approvals for different markets, from the recently expanded capacities have led to increased sales. The company is expecting an EDQM/European authority audit in fourth week of November 2016 for the Tarapur facility. It has invested in automation of its quality systems, which will be helpful for future regulatory audits. With improvement in profits, EPS improved to Rs.9.11 from Rs.6.49 in the last period.

For the first half ended September 2016, Aarti’s consolidated net sales increased by 9.2 per cent to Rs.607 crore from Rs.556 crore in the same half of last year. Its net profit went up by 26.9 per cent to Rs.42.01 crore fro Rs.33.11 crore.

Last nonth Aarti Drugs has approved the buyback upto 3,60,000 fully paid-up equity shares representing upto 1.49 percent of the total number of equity shares of the company at a price of Rs 750 per equity share.

Disclosure - Constitutes less than 1% of my portfolio.


(bbbhutra) #70

(bbbhutra) #71

http://economictimes.indiatimes.com/opinion/interviews/demonetisation-pushed-domestic-sales-down-but-biz-set-to-go-up-adhish-patil-cfo-aarti-drugs/articleshow/57055340.cms


(kauban) #72

is there any update on the US FDA issues? also what’s your take on the Tarapur plant closure? Although they aren’t the only ones pulled up (Camlin Fine, Atul also facing similar action from the authorities), if we overlay their issues with the US FDA and now with pollution control, what does this tell about how they run their plants? cutting corners?


(bbbhutra) #73

Below is the companies reply relating to pollution control -

http://corporates.bseindia.com/xml-data/corpfiling/AttachHis/adee27cc-b7e9-4d57-8418-9edba57749aa.pdf

US FDA is something that the whole indian pharma industry is going through. I guess things will improve over time. While investing in pharma sector one needs to have lots of patience since it takes years to develop and market a product. I guess 2018/19 should be good for the company since they are planning to launch few products around then.

Disclosure - I have allocated less then 0.05% of my portfolio in it. Will look to raise to 1% around 475-500 level.


(bbbhutra) #74

Press release by the company -

March quarter has shown good demand growth in export markets recording the value
growth of around 5 %o and volume growth of around 20% n exports. Lower production
due to forced shutdown of couple of units led to lower supply and in turn decline in
domestic sales. All facilities are running as of now and company expects higher growth
in future.

Consolidated Profit after tax for the quarter ended Mar’17 is 20.73 crores, up by 11,.51,%
due to better gross contributions and reduction in interest cost. Consolidated EBITDA
for the quarter ended Mar’17 is 47.28 crores, up by 3.34%. Debt/Equity ratio came down
to 1.13 as of Mar’17 as compared to 1.33 as of Mar’16.

Company will be inviting USFDA for re-inspection very soon. Same facility was
inspected by EDQM/ European authority in Nov’16 and was recently approved for
European market. Recently, Company got the approval for marketing authorization of
Zolpidem tablets in UK and Ireland. Company is investing in greener technologies to
improve and further reduce the effluent streams, slowly moving towards zero organic
effluent discharge mode. Recently, Central Government of India has granted relief in
terms of provisional anti-dumping duty to one of our products, which will help to
compete against Chinese imports.


(bbbhutra) #75

Turnover and deliverable in the last month was quite high, is something cooking here ?


(bbbhutra) #76

http://economictimes.indiatimes.com/markets/expert-view/forex-policy-does-not-impact-our-margins-adhish-patil-cfo-aarti-drugs/articleshow/60173314.cms


(kauban) #77

A detailed initiating coverage report on ADL was published last week by Centrum. Good read.


(bbbhutra) #78

Press release for Mar’18:

March quarter has shown good demand growth in API market, with a value growth of
around 16.8 %,whereas consolidated sales grew by 10.6 %. Volume growth of about 8 %
in API market was a major contributing factor for revenue growth along with increase
in selling prices.

Consolidated EBITDA for the quarter ended Mar’18 is 57.38 crores, up by 18.2% and
Consolidated Profit after tax for the quarter ended Mar’18 is 23.99 crores, up by 9.2 %.
Operating margins are very good due to lower raw material costs and better operational
efficiency. Company will be focusing on reduction of inventories in coming quarter to
further reduce working capital. Company successfully completed share buyback in Mar
quarter and still was able to reduce Debt/Equity ratio to 1.19 as of Mar’18.

Company will be submitting final response to USFDA by the end of Jun’18 quarter for
the latest re-inspection, which took place in Dec’17. Europe and Southeast Asia will
continue to be key growth drivers for the company in exports. Company started with
the commercial operations in its recently commissioned multipurpose facility in
Tarapur, which is ultimately intended for the API exports to European markets. As of
date, Company also resumed the production of all the three products that were affected
in the unfortunate accident, which occurred in the neighboring plant of Novaphene
Specialities Pvt. Ltd in the month of Mar’18

Disclosure - Currently forms around 0.5% of my portfolio, holding since June 2015. Will look to double stake around 510 level. Fy2020 should be a good year for the company. Market Cap to Sales at 1 provides some comfort to valuation.