Ajanta Pharma Post Robust Q3FY13 Numbers, Stock Up By 20%

DSIJ Intelligence / 23 Jan 2013

Ajanta Pharma, during market hours today, reported a robust set of Dec 2012 quarter numbers. As soon as the result was announced, the shares surged by 20% per cent to Rs 490.65 per share hitting the circuit limit for the day as the trading was halted for the day.
Ajanta Pharma, during market hours today, reported a robust set of Dec 2012 quarter numbers. As soon as the result was announced, the shares surged by 20% per cent to Rs 490.65 per share hitting the circuit limit for the day as the trading was halted for the day. As per the Bombay Stock Exchange (BSE) data, at around 12.30 pm, there were around 61646 buying orders for the stock which were pending in the system with no sellers. The following table shows us the overall financial performance of the company. 

Particulars

Dec-12

Dec-11

% change

Income from operations

229.34

164.23

39.65

Cost of Raw Material

79.95

53.78

48.66

Total Expenses

169.5

130.14

30.24

EBITDA

59.84

34.09

75.54

EBITDA Margin (%)

26.09

20.76

-

Depreciation

8.06

8.17

-1.35

Interest Expense

3.37

3.73

-9.65

Tax Expense

16.31

3.97

310.83

Net Profit

32.57

18.51

75.96

Net Profit Margin (%)

14.2

11.27

-

Diluted EPS

13.88

7.9

75.70

For the Dec 2012 quarter, income from operations for the company grew by 40% to Rs 229 crore while net profit grew at a robust rate of 76% to Rs 33 crore. The sharp rise in profits came ahead of foreign exchange fluctuations where it had made losses of Rs 6 crore in the similar period last quarter. If this is further normalised, the company’s net profit will grow by 30% to Rs 32 crore.The EBITDA increased by 76% to Rs 60 crore on a YoY basis, while the EBITDA margin improved by 533 basis points to 26.09% for the quarter ended Dec 2012. The net profit margin also improved by 293 basis points to 14.2% on a YoY basis.

Ajanta Pharma recently received marketing authorisation in UK for Sildenafil Tablets (of 50 mg and 100 mg). The company is expected to launch the same in UK when it goes off patent in June 2013 and hence the full impact of the same on the revenue front, can be seen from the Sep 13 quarter. The company also filed two more Abbreviated New Drug Applications (ANDA) with US FDA, taking the total ANDA pending approval to nine. If this is approved by the US FDA, it will be beneficial for the company. 

Even for 9MFY13, the company posted robust numbers. Income from operation increased by 38% to Rs 589 crore and net profit grew by 72% to Rs 74 crore on a YoY basis. 9MFY13, Earning per share (EPS) for the company stands at Rs 31.54 already surpassing the full year FY12 EPS of Rs 28.33. On a normal basis, we estimate that the company will post a full year FY13 EPS of at least Rs 40. At the current market price of 490, the stock is still available at a PE of 12.25x of FY13 EPS, which is fairly valued. We believe that the stock will move higher in the near term post the good set of numbers.     

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