Recommendation from Pharmaceuticals & Drugs Sector

This section gives a recommendation of a stock having stock price below Rs 150 with sound fundamentals and expected to give handsome returns over a one-year time horizon. 

BLISS GVS PHARMA LIMITED:: GOING GLOBAL ON A PROFITABLE NOTE

HERE IS WHY
✓ Good growth potential in the pharmaceutical industry
✓ Strong track record in developing and manufacturing
✓ Leadership in suppositories and pessaries dosage forms

I ndia is the largest global provider of generic drugs and affordable vaccines, with the Indian pharmaceutical industry ranking third in production volume. The industry includes generic drugs, over-the-counter medications, bulk drugs, vaccines, contract research, biosimilars and biologics. The Indian pharmaceutical sector supplies over 50 per cent of the global vaccine demand, 40 per cent of the generic demand in the US, and 25 per cent of all medicine in the UK.

The Indian pharmaceutical industry is expected to reach a market size of USD 130 billion by 2030 and USD 450 billion by 2047. The industry is currently worth approximately USD 50 billion, with over USD 25 billion coming from exports. The biosimilar market in India is expected to grow at a CAGR of 22 per cent to reach USD 12 billion by 2025. Owing to this, Bliss GVS Pharma Limited is our top pick for a low-priced stock in this sector.

The company has a strong track record in developing, manufacturing and marketing high-quality pharmaceutical formulations at affordable prices for the global market. It has a wide range of therapeutic categories, including anti-malarial, anti-fungal, contraceptive, laxative, anti-haemorrhoidal, anti-spasmodic, antibiotic, anti-microbial, anti-inflammatory, anti-pyretic and analgesic. Bliss GVS Pharma is a world leader in suppositories and pessaries dosage forms, with a large portfolio across over 60 countries.

The company’s leadership in manufacturing suppositories and pessaries dosage forms demonstrates its specialised capabilities and expertise. By incorporating advanced technology and adhering to stringent operational practices, Bliss GVS Pharma can maintain high-quality standards and meet the global regulatory requirements. With consistent investments in research and development and a robust manufacturing infrastructure, the company can continue to develop new products and improve operational efficiency.

Its aim to diversify into the global market presents significant growth opportunities. This is because it can leverage its expertise and product portfolio to expand its reach and capture new customer segments. In Q1FY25, on a consolidated basis, its revenue increased by 15.12 per cent YoY to ₹183.64 crore as compared to ₹159.52 crore from the previous year’s same quarter. On a sequential basis, the company’s revenue decreased by 7.31 per cent.

The PBIDT excluding other income increased by 41.79 per cent to ₹34.33 crore YoY as compared to ₹24.21 crore from the previous year’s same quarter. It has sequentially increased by 21.11 per cent. The net profit stood at ₹22.11 crore compared to ₹14.37 crore, a YoY increase of 53.8 per cent, while sequentially increasing by 549.88 per cent from ₹(-) 4.91 crore. At TTM, the shares of Bliss GVS Pharma are trading at a PE of 13.3 times, which is slightly higher than its three-year median PE of 12.8 times and lower than the industry PE of 34.8 times.

The company has maintained a threeyear ROE and ROCE of 7.46 per cent and 13.4 per cent, respectively. It has a three-year compounded sales and profit growth of 10 per cent and 11 per cent, respectively. Bliss GVS Pharma has an interest coverage ratio of 23.2 times and has a Piotroski score of 8. Given the aforementioned factors and the positive outlook for the pharmaceutical sector, we recommend BUY.