Fermenta Biotech Limited (Old Name DIL - Duphar-Interfran Ltd)

Dil ltd is in business of Leasing properties,Motion film production and distribution and in treasury operations.The company has also strategic investments insubsidiaries,joint ventures which are engaged in manufacturingbulk drugs, drug discovery and development services etc.


-Dil is joint venture company promoted by SOLVAY PHARMA and DATLA family.

-This joint venture runs upto FY2000.The products released by it are wellknown brands CROCIN,VERTIN,COLOSPA etc.

)- IN 2000 SOLVAY went to supreme court to demerge its unit .All the brands gone to SOLVAY (DUPEN LABS)

-In demerger process every share holder in DIL got two shares of SOLVAY.

-DIL left with small chemical business and cash.


-DIL has properties at THANE,WORLI.From these properties it gets rental income.(Approx 12cr PBT ).

-DIL has approx 36 cr mutual funds and 14 cr in cash

-Small revenues from business in Motion film production business.



-DIL has 94.5 per stake in FERMENTA BIOTECH,a company pioneer in Pharma,biotechnology and environmental solutions.

-FBL is pioneer in Penicillin G amydase enzyme a patented product,Betalactums,Vitamin c3 etc.

-In fy 2011 it achieved 65 cr sales and 14cr PBT.(45 cr sales& 6 cr pbt in 2010)

-Few months back EVOLVENCE life sciences fund take 21 per stake In FBL for 40 cr.It buys each share at Rs 104.AT this price FBL market cap is 190 cr.

-After all transactions DIL has 75 per stake in FBL.

-Other than FBL it has stake in EVOTEC,RSIL,HWIPL.HWIPL operates ZYMS and spa in name of ZELA life.At present DIL has 30 per stake in HWIPL.



-EQUITY- 2.29 cr MAR CAP-100 cr

DIVIDENDS- 50 ,100 ,150 ,150 ,250 in corresponding last five years.

CASH-36 cr mfs+14 cr cash Total-50 cr

It seems like very good buy considering value and growth in form of Fermenta.Cash per share is alone Rs 275 .Value of FBL per share is Rs 650.After considering its real estate value and at 6 per yield it is compelling.


Dil Ltd has informed BSE that the Board of Directors of the Company at its meeting held on September 28, 2011, has Considered and approved the following:

1). The Board of Directors of DIL has approved the execution of a Share Purchase Agreement (Agreement) primarily between DIL Ltd (Transferor) and Evotec AG (Transferee), concerning transfer of 1,09,26,000 fully paid equity shares (face value of Rs. 2/- per share) i.e. 30% of the paid up equity share capital of Evotec (India) Pvt. Ltd. (EIPL), currently an associate company of DIL, for a total consideration of Rs. 11,29,33,210 (Rupees Eleven crores Twenty nine lakhs Thirty three thousand Two hundred ten only). The above transaction is anticipated to close on October 04, 2011.

Post transfer of shares in EIPL, DIL will not hold any equity shares in the paid up equity share capital in EIPL.

2). The Board of Directors of DIL has also approved and authorized filing of requisite application(s) with statutory authorities, including Thane Municipal Corporation, for seeking permission to redevelop part of its Thane property situated at ‘DIL’ complex, Ghodbunder Road, Majiwada, Thane (West) â400610.

Synopsis from AR 2011

**Fermenta Biotech:During the year under review, FBL has not only****reported a 36 % growth in its revenues and 126%**increase in the profit after tax, but also reinvested

in its business with the objective to make its growthsustainable. This was largely the result of volumeand margin growth in its Vitamin D3 (pharma, foodand feed applications) vertical on the one handand enhanced revenues derived from the

manufacture of Phenyramidol and Activated****Dimethicone Powder (anti-flatulent).

** FBLâs Phenyramidol API business achieved much ofits international potential. The business receivedrepeat orders from clients leading to the possibility**

of growing volumes over the foreseeable future.

** FBL Biotech division has successfully demonstratedits new enzyme catalyst Novel Penicillin G Acylase(NPGA) â FERMASE NA 150 to its various clients in**

2010-11 and is on the verge of commercial****supplies.

** FBL Environmental Life Sciences division comprises****of three segments â sewage treatment plant (STP),lake & pond remediation and oil remediation.**


Facilities expansion

FBL commissioned a new manufacturing facility at**

Dahej SEZ, Gujarat. The new manufacturing site will

help FBL in providing larger production capabilities,

better economies, wider international presence and

enhanced overall competitiveness.



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Cmp: 430 Market cap: 100 Cr. Dividend: 250% YIELD: 6%

Liquid Cash: 60 Cr Equity: 2.29 Cr

Annual rental income from Real estate:12-14 cr.(Applied for development of property at Majiwada,Thane.)

Total Shares holding in Fermenta Biotech:12,762,464 (72%)

Private equity placement in Fermenta at Rs 104 per share.Value: 132 cr.



So with liquid cash reserves of 60 per market cap and holding 1.5 times value of mar cap in Fermenta biotech it’s very attractive.Promoters are trustworthy they are distributing very good dividends.(25,50,100,150,150,250).When the Fermenta biotech comes to IPO (assuming 2 years) there is decent upside along with good protection.

Interesting stock-- DIL.

The margin of safety seems to be good here due to its cash and holdings in other companies. Having said that, the markets these days are in no mood to value companies based on their holdings value or cash per share value as seen from the likes of Piramal healthcare etc.

The saving grace here will be the fantastic dividend paid out and consistently increased by the promoters. This in my guess should limit downsides going forward.

Three year results shows stupendous growth in profits. Is it going to continue this momentum?



Hi Hitesh,

Are you still following DIL ltd? It would be great if you can share any latest updates if you have.



not much idea about dil. i had a cursory look at it earlier but stopped following it.

DIL Ltd - Update - Standalone

Market cap 124 cr, Equity 2.29 cr, FV 10

The company is developing its 6.5 acre freehold land in Ghodbunder Road, Thane(w) with Phase I (2 lakh sq ft) likely completion by end of September 2015. (Rental income ~ Rs. 60/sq ft/ month)

Phase II will start post 100% occupancy of Phase I. It also owns 50 acre land bank at Takwe, Pune.

DIL ltd owns 0.3% stake in Syngene international as per DRHP filed with SEBI.

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Update on DIL - As informed to the BSE on 11th October 2017, DIL has repurchased the shares from Evolvence Life Sciences Fund taking its shareholding up to 91% +

It will also be merging FBL with DIL.

Good times ahead for DIL?

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DIL Limited (DIL), has two businesses:

 Bulk Drugs & Chemicals business through its subsidiary (91% stake), Fermenta Biotech Ltd.

• Fermenta manufactures Vitamin D3 (Cholecalciferol). It is the only manufacturer and supplier in India and among the top three manufacturers in the world.
• Vitamin D3 Crystals for use in pharma / human food supplements and Vitamin D3 500 feed grade for use in animal feed supplements are the main products of Fermenta
• Exports account for 75% of Sales. High quality Customers in Europe and US.

 Property Division – Rental Income from leasing Commercial Property, “Thane One”. (Rental income ~ Rs. 60/sq ft/ month). 2 Lakh sq ft developed in Phase I. Potential to develop 6.5 acres in Phase II. Another Office property let out in prime location in Worli, Mumbai

Recent Developments –

 Vitamin D3 prices have seen a sharp rise in international markets since September 2017 especially in Vitamin D3 (VD3) Animal Feed grade. China has cut production due to strict environment policies. As a result, there is severe short supply of Vitamin D3.
 Average Selling Price movement during the last 18 months:

Product Average Monthly Qty (kgs) Average Selling Price (Rs/ kg)
FY 2017 Apr17 – Sep 17
(Ist Half) Oct 17 – Mar 18
(2nd Half)
VD3 Crystals 600 75000 80000 120000
VD3 Animal Feed 40000 550 2000 3500

 Spike in selling prices of VD3 Animal Feed Grade coupled with stable raw material prices has resulted in significant jump in profits.
 Jump in EPS from Rs.15.34 in Q2 Sep17 to Rs. 82.73 in Q3 Dec 17.
 As per industry reports and Revenue Guidance from Garden Bio (Largest player in the world), VD3 prices are expected to remain high for whole of 2018.

http://www.efeedlink.com/ search/?q=vitamin+d3
http://finance.sina.com.cn/ realstock/company/sz300401/nc. shtml
http://stock.jrj.com.cn/share, disc,2017-11-28,300401,0000000 000000jmp59.shtml

 Segment Profits Summary:
(Rs. In Lakhs)
Dec-17 Sep-17 Dec-16
Segment Revenue
Bulk Drugs / Chemicals 9535 6527 3790
Property 312 288 103

Segment Results
Bulk Drugs / Chemicals 3823 1482 56
Property 61 (88) (239)

Profit Before Tax 3416 1063 (429)

• Property Division recorded profits in Dec17 qtr apparently due to higher occupancy and higher rental income.
• Bulk drugs Division higher profits due to VD3 Animal Feed Grade price rise.

 Consolidated Profits of DIL :
(Rs. In Cr)
Narration Jun-17 Sep-17 Dec-17
Sales 43.65 63.69 98.26
Expenses 41.79 50.28 58.82
Operating Profit 1.86 13.41 39.44
Other Income 0.15 4.31 0.15
Depreciation 2.76 2.93 3.04
Interest 2.66 4.15 2.39
Profit before tax -3.41 10.64 34.17
Tax 0.30 4.26 7.70
Net profit -4.03 3.52 18.97

OPM 4% 21% 40%
(Source : screener.in)
 DIL has purchased additional 20 % equity stake in Fermenta Biotech from Evolvence Life Sciences Fund for Rs.100 crores in October 2017, thereby increasing its stake to 91 %.
 Simultaneously, DIL has also announced its plan to merge Fermenta with DIL.

Valuation Metrics:

  1. DIL posting a quarterly EPS of Rs.82.73 in Q3 Dec 17. Annualised EPS estimated at Rs.320 considering that VD3 prices are expected to remain high through 2018.
  2. Current market Cap Rs.600 crores. Real Estate Division is valued at Rs.500 cr+, considering Thane One, 6.5 acre land development potential and Commercial Office property in Iconic Building in Worli
  3. Company available at a P/E of 9x. Generally Companies manufacturing API are quoted at P/E multiple of 20x - 25x
  4. Still significant upside potential.

Sir, It is worth to looking at DIL ltd as their recent Quarter’s no. showed shocking growth. I mean could be speculative numbers too IMO???

Hi @ayushmit,

The entire bet is on Fermenta Vitamin D. Do you think growth they are seeing is sustainable? What are your views generally on the company?

Hi @deepender

Yes. This is the key company and major contributor to the financials.

Can’t say if the current numbers are sustainable or not. In past they have been pretty volatile and from what I understand, Vitamin D3 prices had gone up substantially over last several months. In between they did come down but then they went up again. I don’t know the current status.

What did interest me was that there seems to be some entry barrier (due to either technology or raw material sourcing or chemistry involved) and Fermenta is the only company from India and one of the few globally to be manufacturing this product. And the demand has been increasing for this product as most of us are Vitamin D3 deficient these days. But yes, one needs to take current nos with caution as the margins are pretty high.

What would be interesting going forward is - can this company use to current cash flows (windfall) to grow further or develop something worthwhile over longer term?


Credit rating - Issuer not cooperating, based on best-available information; Rating revised to 'Watch with Developing Implications Issuer not cooperating’ ; Rating withdrawn


Disc - Not invested

Vitamin D3 is not just another micro-nutrient, but a hormone which plays important signalling roles in calcium metabolism, regulating the adaptive immune system (through inflammation and oxidative stress inhibition)

Personally, I was found to be Vitamin D deficient when initially diagnosed with Type 2 Diabetes. Given the fact that Vitamin D is an important hormone in the endocrine system, research shows that deficiency of this vital molecule is linked to most of the major chronic illnesses, whether it is neuro-degenerative or cardio-vascular.

Below is an interesting excerpt:

A simple Google search for “what does vitamin D do?” highlights the widely used dietary supplement’s role in regulating calcium absorption and promoting bone growth. But now it appears that vitamin D has much wider effects – at least in the nematode worm, C. elegans . Research at the Buck Institute shows that vitamin D works through genes known to influence longevity and impacts processes associated with many human age-related diseases. The study, published in Cell Reports , may explain why vitamin D deficiency has been linked to breast, colon and prostate cancer, as well as obesity, heart disease and depression.
“Vitamin D engaged with known longevity genes - it extended median lifespan by 33 percent and slowed the aging-related misfolding of hundreds of proteins in the worm,” said Gordon Lithgow, PhD, senior author and Buck Institute professor. “Our findings provide a real connection between aging and disease and give clinicians and other researchers an opportunity to look at vitamin D in a much larger context.”

Our data suggest that any improvement in vitamin D status will significantly affect expression of genes that have a wide variety of biologic functions of more than 160 pathways linked to cancer, autoimmune disorders and cardiovascular disease with have been associated with vitamin D deficiency. This study reveals for the first time molecular finger prints that help explain the nonskeletal health benefits of vitamin D.

Other proven mechanisms of increasing longevity are calorie restriction (fasting), resveratrol, rapamycin, and few others in the same worm model and mouse models.
Caveat: No human trials yet.

Below link is to the actual paper referred by the above excerpt.

Having said all of the above, Sunshine is still the best synthesizer of Vitamin D compared to foods rich in Vitamin D such as meat or supplements.

Given a choice I would prefer to take a walk in the Sun rather than supplement.

Moreover, Vitamin D does not seem to be major disorder for tropical regions which receive lot of Sun. Not the same for Northern Europe which receives lot less sun and would definitely require supplementation especially for vegetarians.

Link to paper of Asian children suffering from rickets in Scotland


Few reasons which has been suggested for the above scenario was:

  1. Lack of sun
  2. Vegetarian diet
  3. Genetic polymorphism predisposing to vitamin D deficiency.

Vitamin D3 is generally observed to be more effective than Vitamin D2.

Disc: Not invested.


Auditor has provided Qualified Opinion and found inherent limitations of Internal Financial Controls Over Financial Reporting in FY18 annual report:

Disc: not invested


Dil ltd posted outstanding result but trade receivables also increased substantially


Investor Presentation…worth watching

They have already achieved 69 % of FY 18 sales in first half and are projecting only 25%growth for FY19. How should we interpret this guidence. Are they down playing the exuberance of high growth rates or growth will substantially slow down in coming quarters.