Novartis India is a 51 per cent subsidiary of Swiss giant Novartis, One of world`s leading pharmaceutical and consumer health company. Novartis main businesses in India include pharmaceutical (70%), Animal Health (7%), Generics(8%) and OTC(15%).
Novartis pharmaceutical segment includes therapeutic medicines like hypertension, anti inflammatory and anti fungal. Generic segment includes gynaecology and anti-TB. OTC includes vitamins and minerals. Animal health includes drugs for cattle.
Novartis top leading product portfolio includes Voveran, Methergin, Regestrone, PZA Ciba, Otrivin, Calcium Sandoz and others.
Investor with a medium risk appetite can consider investment into this stock with a horizon of 12 months. At the current price of Rs. 336/- the stock trades at 11 times it's 12 month trailing EPS of 30.72. In the current quarter Q2' 07 the company saw a healthy operating margin of 33.64% as compared with a average of 24% in the earlier few quarters. This translated in to around 22% increase in net profit growth q-o-q. This seems to me a surprise number for a company which has been growing at a rate of 10% for the last 5 to 6 quarters.
Betting on current valuation
As of now there is no data available to compute it's forward earnings. But at the current price the stock is availabe at a discount to it's MNC peers. The stock has a target of Rs. 410/- which translates to 14 times it's 12 month trailing EPS on par with it's MNC peers of equal cader.
The company will get a even better re-rating if the current quarter performance continues in the forward earnings.
Fundamentals
1) Excellent product portfolio and diversified business operation
2) Fifth largest MNC pharma in India by profit.
3) Looking for new global brands to be introduced in India, which will increase the topline further.
4) One of the few players in the growing Animal health arena in India.
5) Decent dividend paying company.
Risks
1) Uncertainty about price control regime looms large
2) Changes in regulatory environment e.g. VAT, MRP based Excise, Service Tax etc
3) Evolution and enforcement of Intellectual Property Rights (IPR) in India
4) counterfeiting of Novartis drugs by Indian pharmaceuticals and selling at an cheaper rate.
Buy Microsoft Products with us and Save upto 60%
Monday, October 29, 2007
Novartis India - Value Buy
Subscribe to:
Post Comments (Atom)
5 comments:
Hi Srivatsan,
As per your suggestion i got MADREF share which initially was in loss,but now it has picked up slowly...Thanks alot.
Hi Usha,
Even though the stock looks good for long term, I advise you to take a call in chennai petro after the results tomorrow. Will update you with the results tomorrow and what are it's short term prospects. Thanks
viagra generic purchase viagra negative effects of viagra viagra jelly cheapest uk supplier viagra buying viagra online viagra rrp australia buy viagra in canada online viagra what is generic viagra cialis levia and viagra cheapest viagra in uk viagra uterine thickness viagra soft tabs
Your blog keeps getting better and better! Your older articles are not as good as newer ones you have a lot more creativity and originality now keep it up!
free por [url=http://pornushi.ru/english-version/full-free-porn/cartoon-lesbo-porno.html]cartoon lesbo porno[/url]
Post a Comment