Ajanta Pharma - Q1 Result

Financial Results & Limited Review for June 30, 2013
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Results Press Release
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Board recommends Bonus Issue:
Ajanta Pharma Ltd has informed BSE that the Board of Directors of the Company at its meeting held on July 29, 2013, inter alia, have recommended Bonus Shares in the ratio of One new fully paid-up Equity Share for every Two fully paid-up Equity Share.
Ajanta Pharma Ltd has informed BSE that the dispatch of bonus shares would be completed on or before September 29, 2013.

Another good set of numbers given by Ajanta Pharma. But still stock has seen some negative movements because of the fact that, we were so far, addicted with record revenues coming up with every quarter since last 1 year. That didn't happen this time. It didn't came in as a surprise to me, because even if you look at earnings last year, the revenues in June quarter were slightly less than Mar quarter. The difference was less last time, but still, there is something which is affecting June quarter numbers. What we consider as base of comparison, is the year on year factor.

Revenues stands at 219 Cr from 174 Cr, which represents growth of 26%.
Net Profit stands at 32.54 Cr from 19.58 Cr, which represents jump of 66%.
EPS for the quarter turns out to be 13.89, which is fabulous, in terms of profits made by the company.

My Views:
For long term investors, I would recommend a hold at this price, as we expect the company to grow further in coming quarters. We are still waiting for operations to begin at 2 new plants in Gujarat, which will also start contributing to revenues. But still, as per management those plants will be operational from 2014-15. Hence its about patience of each investor. Overall if you see, the target of 1000 in 2 years, which I posted in last September, is already achieved. But considering the fact that the growth shown by the company is tremendous, and we have 2 new plants getting operation by next year, I expect the stock to go to 1500 or above levels in next 2 years time.

Note: After the bonus is issued, the price of the share will 2/3rd of the last traded price.
Hence, if the stock is trading at 1000 on last day before issue of bonus share, then price will be 666 on the next day, once bonus shares are issued.
Hence the target of 1500 Rs in next 2 years, is equivalent to a target of 1000 Rs in next 2 years, after bonus share adjustment.