Surya Narayan Patra of SSKI & Sharekhan discusses his picks from the pharma space.
Patra states that Elder Pharma's results were in line with their expectations. According to him, the company has reported 30 per cent topline growth whereas bottomline has grown by around 94 per cent. Patra believes that the company can maintain the kind of growth that they are showing since the last couple of quarters in future too.
As regards Dishman Pharma, Patra is not too pleased with their results. However, he says that their results were in line with their expectation. Patra says that once the synergistic benefits from the CarboGen-Amcis acquisition starts showing, one would see stronger bottomline growth, going forward.
Excerpts from CNBC TV18's exclusive interview with Surya Narayan Patra:
From the pharmaceutical space, did you like what Elder Pharma had to report?
Elder Pharma's results were in line with our expectations. They have reported 30 per cent topline growth whereas bottomline grew by around 94 per cent. We believe that the company can maintain the kind of growth that they are showing since the last couple of quarters, going forward too.
Basically their domestic performance, in which pharmaceuticals contribute around 70 per cent to the topline, are growing well in line with the industry. Their new product 'Fair One' is getting a good response in the domestic market. That is why it is showing tremendous growth.
Licensing products portfolio have also been contributing well. So it is to be maintained going forward too. In the bottomline, we will see similar growth because they are progressively shifting their products to Uttaranchal and Himachal facility. So that would give fiscal benefit in terms of excise and will maintain the bottomline growth as well.
What about Dishman Pharma? Are you happy with those numbers as well?
We are not very happy with the results but still this is also in line with the expectations because topline has grown 70 per cent. This is largely because of that incremental revenue flowing from CarboGen-Amcis. But margins have come down largely because of the increased staff cost.
This is because of the integration of the CarboGen-Amcis business. We have to understand here that the CarboGen-Amcis business is a low margin business so far. But once we see the synergistic benefits coming from this acquisition, we would see stronger bottomline growth as well, going forward.
Any disclosures?
Probably, our clients must be holding Dishman and Elder Pharma stocks.
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