Unichem laboratories ltd

Bala,

you can check it herehttp://www.researchbytes.com/Unichem-Laboratories-Limited-U0028.htm

read a recent update on unichem post q3 fy 13 from avendus.

they project sales of 977 crores (9M achieved till date 755 crores) and net profit of 107 crores (9M achieved till date 98 crores.)

This implies that company will achieve only 9 cr net profits in last quarter.

I dont know how these morons make the projections.

Personally I expect something close to 130 crores for fy 13.

They hosted the earnings call.:slight_smile:

** I projections. **

Prakash Mody, the chairman of Unichem buys from open markets.

60000 shares from bse (on 23 jan 13) from bse

link;http://www.bseindia.com/corporates/ann.aspx?curpg=1&annflag=1&dt=&dur=A&dtto=&cat=&scrip=506690&anntype=A

and found that he also bought 2.35 lacs shares on nse around the same date. (cant find the link on nse).

Promoters buying near 52 weeks high should be good news and be reassuring for long term investors.

They get 30% of the revenue from 2 products which are maturing and growth is not there much(low single digit), this has to be compensated by 18-20% growth in their growth products ie (70% of their portfolio) to achieve 12% -15% growth on a consolidated basis. The management replied that they are not only looking at growth but also productivity.

In the concall they had replied that they are confident of growing their growth segments(new molecules and molecules introduced last year) by 20% for the next 10 years!!!

They also mentioned that they arecommittedto grow more than 200 - 300 bps than the average industrial growth. They remained bullish on exports also.

Mr. Prakash Mody buys 2.74lac shares of Unichem on 28th, 29th & 30thJan.increasing his holding from 44.01 to 44.31%.

http://www.bseindia.com/xml-data/corpfiling/AttachLive/Unichem_Laboratories_Ltd_040213_SAST.pdf

link;http://www.bseindia.com/corporates/ann.aspx?curpg=1&annflag=1&dt=&dur=A&dtto=&cat=&scrip=506690&anntype=A Link: http://www.bseindia.com/corporates/ann.aspx?curpg=1&annflag=1&dt=&dur=A&dtto=&cat=&scrip=506690&anntype=A

Hi Hitesh,

Prakash Mody seems to be on buying spree. Some more buying by him,link:

Hitesh,

Any view on Unichem? Stock is down more than 20% since results inspite of promoter’s buying. Is it time to accumulate or be cautious on this script?

rajat,

I think unichem offers a good entry point around 175 levels.

Promoter dr prakash mody had around 3.97 cr shares as on dec 12 shareholding pattern.

Now according to latest disclosure on feb 13, he has bought more shares and his stake now stands at around 4.01 cr shares. Effectively he has bought around 4.4 lac shares from open market since jan 13. To me this seems to be a very encouraging sign.

I hold the view that company remains an excellent buy with a view of 1-2 years.

I added more today around 174.

Thanks hitesh, Even I hold the same view and have added some today.

Added at 171

Any thoughts of implications of the news below

Outcome of Board Meeting 15 Feb 2013 17:31
Unichem Laboratories Ltd has informed BSE that the Board of Directors of the Company at its meeting held on February 15, 2013, has discussed and decided on the following;

1. Board approved the sale of Companyâs new formulation manufacturing unit located at Industrial Area, Special Economic Zone, Phase 2, of Tehsil Dhar of the Dhar District, Madhya Pradesh, Republic of India, the site comprising an area admeasuring 1,17,301 square meters along with all assets comprising the formulation unit, on a slump sale basis to M/s. Mylan Laboratories Limited (âMylanâ)for a total consideration of Rs. 160.50 crores (âProposed Saleâ) subject to execution of a definitive agreement(s) between the Company and Mylan, reflecting detail terms and condition for the proposed sale and subject to approval of shareholders through a postal ballot and on receipt of requisite/regulatory approvals.

2. Board approved the Notice and Explanatory Statement for conducting postal ballot for seeking approval of the shareholders for the aforesaid Proposed Sale pursuant to section 293(1)(a) and 192A of the Companies Act 1956.

3. Board approved calendar of events for postal ballot.

4. Board appointed Mrs. Ragini Chokshi, Practicing Company Secretary, Mumbai as scrutinizer of the postal ballot process.

I think it should be viewed as very positive news. Company should find the 160 crores very useful in expanding the Goa facility. Most of the reasons seem logical enough.

They have also given reasons for selling the SEZ as follows:

Reasons for sale of SEZ Indore Unit to Mylan:

â At this point of time, the Company has excess capacities mainly due to delay in approval of

ANDAâs submitted to USFDA.

â The delays in getting approvals will also delay in fruitfully utilizing the SEZ capacity which will in

turn affect Companyâs export obligations given to SEZ authorities for the next 5 years. The

company foresees a long gestation period for the SEZ project to effectively contribute to the

Companyâs top line and profits.

â The Company is subject to Minimum Alternate Tax under the Income Tax Act, 1961 and is

expected to continue. The SEZ profits are also subject to Minimum Alternate Tax as per the

recent changes under Income Tax Act.

â The Company intends to expand its Goa facility where it has acquired additional adjacent land.

â The advantages of expanding Goa manufacturing facilities are mainly:

1). The Goa facility is already approved and the expansion could be done at a lower cost

seamlessly integrating using the existing infrastructure and logistics.

2). Gestation period is shorter. We can set up 5 billion tablets/capsules capacity at a

reasonable cost.

3). The Company can save on cost of operations in terms of overheads and other fixed

costs at the existing Goa facility and can enjoy economies of scale.

4). The Company can save on additional annual inspection fees levied by regulatory

authority year on year.

5). The Company can also utilize the recently set up âCentre of Excellenceâ which

comprises of Research & Development and formulation development facility more

efficiently.

6). The Company can also set up a state-of-the-art pharmaceutical storing warehouse in

Goa in the present vicinity.

7). Convenience of management.

Investor Relations Desk

Unichem Laboratories

According to Reliance securities, Unichem made a profit of 45 cr from the sale of indore facility !

Reliance securities update says " Unichem has spent ~Rs115cr on the plant construction. It has thusclinched in a neat profit of Rs45cr on the plant. We view this as a pure profitmaking trade between Unichem and Mylan. Since Unichem plans to double thecapacity at Goa facility, the incremental cost for the same would be Rs30-40cr.The company has recovered its investment in Indore and would utilize it ondomestic acquisitions, largely in branding. Also, given the fact that no special taxexemptions are now associated with the SEZ, the sale would not impact thecompanyâs business".

Hitesh Bhai,

What according to you will be the important growth drivers for Unichem in FY14 and FY15 (am sorry if it seems a silly question coz have just started analyzing pharma companies)? Which segments (cardio, derma etc) will be the growth drivers for the company in near to medium term? How important will be the export thrust for the company in FY14 and FY15 (coz in current year exports have been growth driver for the company compared to domestic market)? Coz you are a doctor and one of the best guys who understands pharma companies well unlike most of us it would be great if you can share with us your experience with the MRs of the company after the change in distribution system and resolution of attrition issues?

Regards

Ankit

Growth drivers wil be

1). Better than industry growth in domestic pharma space through expanded capacities, better utilisation of the MRs recruited in the past.

2). Export markets are growing very well for the company and will continue to grow.

3). Sale of SEZ according to management is not going to affect the tax rates as SEZ no longer carry significant tax benefits. And the money generated will be better utilised to augment capacities in Goa plant. (management has already outlined the rationale for sale of SEZ plant.)

4). If and when Niche Generics UK starts its turnaround, it also may start to contribute meaningfully to overall profits. This is a sore point with the company with the turnaround taking more than expected time.

Unichem market share is catching up with the leaders. The overall growth is almost at par with the industry according to the report published by icicidirect.

http://content.icicidirect.com/mailimages/IDirect_HealthCheck_March2013.pdf

Link not working above. Please check.

@Saji Issac John)- above link is not working

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