Saturday, March 6, 2010

Stock Idea: Elder Pharmaceuticals Ltd.

Elder Pharmaceuticals Limited—BUY—355—INR
Sector— Pharmaceuticals (Bulk drugs & Formulations)— C-9, Dalia Industrial Estate, Andheri (W.), Mumbai - 400053
Listed— BSE, NSE
Company overview—
Company started its operations in 1989 and established its factory in June. In 1991 company started Research and development center for its pharmaceutical products and got recognition from the Government of India. In 1994, company tied up with Haw Par, Singapore to establish its presence in the market. Company came into stock market in 2000 by public issue. In 2003 company commissioned Patalganga Bulk Drug plant. Company ranked among the first 50 companies in India as per ORG Audit. Company's strength lies in marketing products, which are original research products where there are no patent violations and the company has created its own brand equity in pharmaceutical marketing. Elder, which has it's headquarter in Mumbai, is proficiently supported by branch offices in Chennai, Kolkata and New Delhi. It has sales depots in almost every state in the country. Company’s multi expert sales team hence ensures adequate focus on each of the covered therapeutic segments. The focus is on promotion of products in the wound care segment, antibiotics, gastroenterology, respiratory and painkillers segment. Company is engaged in the manufacture of a wide range of pharmaceutical products through research and development and also in the manufacturing and marketing of diverse products through licensing agreements with international pharmaceutical companies. All the company’s plants conform to and follow the most stringent quality control standards recommended as per GMP guidelines.
Products & services—
Elder Pharmaceuticals principal activities include the manufacturing and marketing of prescription pharmaceutical brands, surgical and medical devices. Shelcal, Elder’s No.1 brand is one of the top brands in the Indian Pharmaceutical industry. It is one of the leading players in the pharmaceutical formulation market in India, being a market leader in three therapeutic segments - Women’s Healthcare, Wound Care and Nutraceuticals. Elder has a strong portfolio of brands like Shelcal, Eldervit and Chymoral among others that are leaders in their respective therapeutic segments and manufactured in various dosage forms like tablets, capsules, injections and liquids. Company has products for Antibiotic, Antihistamines & Antiallergics, Antacid & Antiflatulant, Antiulcers, Antidepressant, Anti inflamatory & Analgesics, Antispasmodics, Antifungal, Laxative, Antihelmentics, Cough syrups, Steriods, Antimalarial, Antidiarrhoeal, Cardiac care, Eye/Ear Care, Hematinics, AntiTB, Nutritional Supplement etc. Company has entered into alliances with foreign companies for manufacture and sale of their products under license from them. It also has a presence in the OTC segment and sells the Tiger range of products from Singapore, SOLO Eucamenth tablets, AMPM mouthwash and toothbrushes. The company has diversified into sale of medical equipments. Export markets include Switzerland, Germany, England, Denmark and a few African countries. Company exports its pharma products to Colombia, Vietnam, Madagascar, Mauritius, Nigeria, Uganda, Sri Lanka & Mexico.
Company has alliances and marketing rights with ABC Ltd, USA Oxo-Chemie, Germany Paul Hartmann, Germany, Angelini, Italy GEA Ltd, Denmark TRB Chem., Switzerland Alfa-Wasserman, Italy, Sigma-Tau, Italy Tanabe, Japan Fujisawa, Japan Uriach, Spain, Covex, Spain Ferrer, Spain, Blistex, USA Haw Par, Singapore, Invacare, USA, APR, Switzerland Zambon, Italy Biorga, France Stiefel, USA Sciclone, USA Poli, Switzerland etc. for various products.
Company has strong position in National and International Health Care arena, with focus on research and global collaborations. At current market price, stock is trading at 8.75 P/E multiple of its FY2011 estimated EPS. We recommend investors to "BUY" "Elder Pharmaceuticals Limited" with medium to long-term investment horizon.
Source: Internet (Valuenotes by Abhishek Jain)

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