Please go through this moneylife article to geta brief onthe recent past of the company.
Would encourage you to read the complete article to get a sense what they are up to.
Still, if i could summarize the whole thing in just a few sentences that would be, promoters have been bullish on the India story since some time (going by their delisting attempt,open offers and open market purchases to hike their holding from 56.51% in 2001 to90% now), business was doing reasonably well between 2008-11 with RoE/RoCE well above 35% and net margins in 15%+ range, dividend payout ratio in range of 40% (referring to data on screener.in), until they decided to play the “innocent game” of suspending production, recalling their sterile products manufactured in B’lore and reporting reduced sales and losses in the last 4 quarters with a intention (probable) to delist at the lowest price possible.
**Cut to present **
1). The company has announced "We have now restarted production and are in the process of restoring affected products to the market in a phased manner. We will continue to work hard to resume supply for those medicines which remain out of stock.
You have our commitment that quality will always be our first priority, therefore we will only reintroduce products when we can assure that our global quality standards are met."
2). Delisting game is off -http://www.financialexpress.com/news/astrazeneca-pharma-india-to-cut-promoter-holding-not-delist/1084218/1
3). Today, the company has reported that,
)- Commencing operation at new tablet facility.
)- Retrieving market share of the company products, supplies of which were interrupted last year.
)- Further strengthening the brand presence, Enhancing sales force effectiveness, improved cost management.
)- Promoters AstraZenca Pharma Sweden has decided to provide a voluntary, **non-repayble **financial grant of approax Rs. 114-140 cr. between FY14-16 under a subvention agreement of which the first tranche of 74 cr. will be provided in the current financial year.
Is there a Investment theory ?
If the above points indicate a change of heart on part of the promoters and they want to get back to business as usual, then we may have a MNC Pharma company capable of havingRoE/RoCE well above 35% , net margins of 15%+ , dividend payout ratio of 40%+, Debt free and growth rate of ~20% ? available at ~21 times FY14 earnings (assuming 600 cr. revenue and ~100 cr NP kind of scenario, if they are able to go back to the ‘pre-innocence’ days)
Would love to have comments from all of you.
Disc: Have a starter position and reading up more to see if this is worth following up.