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JB CHEMICALS IS A PHARMA COMPANY WHICH IS INTO MANUFACTURING AND MARKETING OF DRUGS, HERBAL REMEDIES AND RADIO DIAGNOSTICS.
IT HAS MADE IT TO THE FORBES BEST 100 UNDER ONE BILLION DOLLAR COMPANIES.
PRODUCTS:
SOME WELL KNOWN BRANDS LIKE METROGYL(FOR AMOEBIC DYSENTRY), RANTAC(FOR ACIDITY), NICARDIA(HYPERTENSION), OF(OFLOXACIN—ANTIBIOTIC)
IT ALSO MAKES ACTIVE PHARMA INGREDIENTS(API) OF DICLOFENAC, METROGYL, CIPROFLOXACIN, NIFEDIPINE ETC.
FORMULATIONS INCLUDE ANTIDIARRHOEALS, ANTIBIOTICS, ANTI HELMINTHICS, ANTIDIABETICS, ANTIHISTAMINES, CARDIOVASCULAR AND GASTROINTESTINAL DRUGS, BESIDES OTHER OTC PRODUCTS AND OTHER RANGE OF PRODUCTS.
DOKTOR MOM IS A WELL ESTABLISHED OTC HERBAL COUGH PRODUCT OF THE COMPANY IN THE EUROPEAN MARKETS SINCE MANY YEARS.
THE COMPANY IS A BIG PLAYER IN THE RUSSIAN MARKETS AND HAS A SUBSIDIARY TO MARKET ITS PRODUCTS IN RUSSIA AND CIS COUNTRIES.
RECENTLY THE COMPANY HAS ALSO IDENTIFIED SOUTH AFRICA, BRAZIL AND OTHER LATIN AMERICAN COUNTRIES AS FUTURE GROWTH DRIVERS.
FINANCIALS:
EQUITY 16.87 CRORES WITH EACH SHARE OF FACE VALUE OF RS 2
TOTAL DEBT AROUND 170 CRORES (WHICH SEEMS TO HAVE BEEN REDUCED DURING FY10)
PROMOTERS HOLDING AROUND 55%
|
YEAR |
05 |
06 |
07 |
08 |
09 |
9MFY10 |
|
SALES |
371 |
481 |
549 |
565 |
737 |
515 |
|
NP |
59 |
70 |
71 |
51 |
78 |
74 |
|
EPS |
7.3 |
8.8 |
8.8 |
6.1 |
9.3 |
8.78 |
|
Free CF |
3.62 |
2.17 |
8.12 |
-5.2 |
27 |
|
TOTAL MARKET CAP IS AROUND 563 CRORES AT MARKET PRICE OF AROUND 68.
APART FROM PROMOTERS HOLDING 55%(NO PLEDGING)
ASHISH DHAWAN HOLDS AROUND 6.94%
RJ HOLDS 1.48% AND GIC HOLDS AROUND 1.7%
FOR THE DEC QTR, THERE IS SUBSTANTIAL REDUCTION IN INTEREST COST FROM 3.56 CRORES TO 1.58 CRORES.
BOOK VALUE AS ON MARCH 09 WAS 63.
POSITIVES:
1. STOCK AVAILABLE AT CLOSE TO BOOK VALUE OF AROUND 63
2. REASONABLE VALUATIONS OF AROUND 6 BASED ON EXPECTED EPS OF AROUND 11 FOR FY10.
3. LOW DEBT AND POSITIVE CASH FLOWS
4. MANAGEMENT OF THE COMPANY SEEMS TO BE GOOD LOOKING AT THE COMPANY’S TRACK RECORD AND DETAILS FROM ANNUAL REPORT.
NEGATIVES:
ALMOST 50% OF THE REVENUES ARE DERIVED FROM EXPORTS AND THERE IS VULNERABILITY OF CURRENCY LOSSES.
TECHNICAL VIEW:
AFTER POSTING A HIGH OF 139 IN FEB 06, THE COMPANY HAS BEEN IN A LONG TERM DOWNTREND AND SEEMS TO BE COMING OUT OF THE DOWNTREND.
RECENTLY IT BROKE OUT FROM A FALLING LONG TERM TRENDLINE AT THE LEVEL OF 60
ON THE WEEKLY CHARTS THE STOCK HAS FORMED A ROUNDING BOTTOM AND HAS MEDIUM TERM TARGETS OF 100 PLUS.
SUPPORT SEEMS TO BE STRONG IN THE 55-60 RANGE.
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Stockmarket is a weird place. For every person who buys a stock there is a person who sells it and both think they are very smart.
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