Neuland Labs - Has anyone studied it?

Interested to know if anyone has studied Neuland Labs and has a view on it. Also any research reports on it would be welcome:

Niche API play, with turnaround potential; initiating, with a Buy

We initiate coverage on Neuland Labs with a Buy rating and target price of 21,241, based on 16x FY18e earnings. We are positive about the company due to its pipeline of niche APIs, better revenue mix and the potential of a significant turnaround from the past four stagnant years. The ramp-up in its customised-manufacturing solutions business for supplies to innovators would improve profitability.

Niche API play. Of Neuland's revenue, 85% comes from its API busmen, the key APIs currently sold am caprolloxacm, levolloxacm, nurtazapme, levehracetana and entacapone, We expect revenue m this business to register a 143% GAGA over ,15-18 cloven by doe launch of products such as aripipraxole, propofol, salmetrol, etc, which may turn out to be huge revenue opportunities. Upon generic approval, the company has aleady entered into connects with customers for supplies

CMS business to ramp up, with greater profitability.

The CMS business brings ~15% to revenue and includes supplies for molecules under clinical trials and commercial supplies to mid-size phama companies m the US and EU. We expect this business to ramp up with a high 44% GAGR over FY15- 18, fuelled by an increase in commercial supplies and additional revenue from the partnership with Mitsubishi API Corp

Better financials. We expect Neuland to register 22% revenue and 63% PAT CAGRs over EYI5-18, with magma improving 360* ten 17%, The high profitability world help manse debt-equity to 0.7a by FY18 (from 1.1x now ) We expect the RoE and RoCE to improve to 259% and 18%, respectively, by ,18 from 11.2% and 10 5% currently.

 

Target 21,241 from 794

 

Sorry typing error. The target price is Rs. 1,241.

 

NO GOOD. Highly inflated valuation. Business quality subnormal- low margin business,Management quality -subnormal- on management effiency related parameters including existig sales& sales growth.Financial strength- not satisfactory. MY OPINION.

 

On fine search, I could find this much info only ... It's also from their Investor presentation ... Available Research reports are older , nothing new...

 

Thanks @stockjeet18 Its very helpful. Taking a cue, I went to their website and found an investors presentation dated September 2015.

Looks an interesting company, If the turnaround comes through, it can be a big winner.

 

@kharb .How do ur critical perspective view this scrip?

 

Don't track

 

I reaffirm that I would skip this scrip if asked to buy on presentlly public domain based informtions. Why should I buy a mediocre company at 45 times it's earnings which is in low margin API etc business with lot of debt,although I know it has run up very significantly in 2-3 months.It's turnaround story- I have been hearing for last 2-3 years ,but not reflected in numbers as yet. May be I am not privy to some very encouraging inside information or ......I dont know ! There are many turn around stories available in the Pharma sector with much better prospects at better price. .By the way ,this sector is my circle of comfort .

 

@shakti

Do share names of turnaround companies in the pharma space which you are comfortable with

 

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