Ajanta Pharma - Q3 Result Updates

Financial Results & Results Press Release for Dec 31, 2013
Link: Click Here


Another strong set of numbers from Ajanta Pharma. The company has been consistently doing well over last few quarters, and now it seems they have made a habit of declaring net profit growth of more than 50% YoY.

Revenues stands at 301 Cr from 229 Cr last year, which means a growth of 31% in sales.
Net Profit stands at 62 Cr from 33 Cr last year, which means a growth of 92% in profits.
EPS stands at 17.75 for this quarter.
Exports contributed to 65% of their total sales.

The company is looking good to post an annual revenues of close to 1130 Cr, a growth of 35-40% over last year.
Full year EPS is expected to be around 60, which means, company, right now is trading at a P/E of 15.

The company continues to increase their R&D expense, which is encouraging.
R&D expense stands at 39 Cr against 28 Cr last year.
It also continues to file more and more ANDA with US FDA. This year, they have already filed 8 ANDA, with 4 of them in this quarter itself. The total stands at 22, out of which 20 are pending for Approval.
In this quarter, Company has filed 109 product registration dossiers in emerging markets. They already have over 1400 product registrations, and around 1380 product under registration process.

One of the major highlight was their growth in domestic markets.
They generated 98 Cr from domestic markets this quarter, a growth of 38% YoY.
As per IMS MAT Dec 2013, Ajanta has improved its overall ranking to 40th rank in Indian Pharmaceutical Market.
Company has launched 8 more products this quarter, hence making a total of 19 in FY14 so far.

My Views:
The growth story so far, has been excellent. But many investors are now asking whether such growth is sustainable or not. I am still positive, but now, only with an intention to get good returns over my investment. Multi-bagger returns from here on looks slightly difficult. The company already has a market capitalization of 3200 Cr, which is slightly higher as of now, but it can prove to be less, if growth continues in same fashion going ahead.
The gain of 300% last year, was a big surprise, but with strong results coming every quarter, the company certainly has not failed in justifying the price rise so far.
I am still awaiting a word on their 2 new plants in Gujarat.
I would recommend a partial profit booking around 1000 for those who are invested since last 1 year, as it is always a good idea, to book some profits time and again, even if company is continuously performing well. Hold on to rest of the quantity, with a hope that new products will continue to bring more revenues for the company, and initiation of 2 new plants, will add to that.