Suven Life Science is a biopharmaceutical company focused on discovering, developing and commercializing novel pharmaceutical products, which are first in class or best in class CNS therapies.
Suven posted excellent quarterly performance for the quarter ending June 2013. The revenues from operations on jumped by around 54% at Rs.108.67 crores vs Rs.70.53 crores y-o-y. Operating profit climbed manifold at about Rs.43.03 crores as against Rs.13.34 crores in the previous year quarter. The net profit skyrocketed at Rs.29.77 crore for the quarter as compared to Rs.7.96 crore. EPS for the quarter stood at Rs.2.55. Operating profit margin stood at 39.60% witnessing an expansion of 109.41% y-o-y. Net profit margin stood at 27.39%; expanding 142.6% y-o-y. Suven Nishtaa pharma pvt ltd., the 100% subsidiary has been merged with the company wef 1st Jan’ 12.
Revenues from the CRAMS business grew sharply by 64% at Rs.106.89 crores from Rs.65.15 crores y-o-y where as revenues from DDDSS degrew at Rs.1.78 crores. During the quarter 16 product patents were granted to Suven’s drug discovery pipeline which consists of 13 molecules out of which 12 molecules are in pre-clinical stage of development currently.
Suven has grown from a pure contract research player to a collaborative research partner. It integrates all the processes from drug discovery and development services to clinical supplies, manufacturing and packaging. The company has a patent profile of 18 inventions, 569 products patents and 36 process patents.
Valuation
With growing product pipeline, efficient business model, CRAMS business growing sharply, strong research and development ability and healthy relationships with huge global pharma companies; Suven Life Sciences Ltd. revenue stream looks visible. We believe the company is trading at an attractive valuation at 9.7x and 6.99x of FY14EPS of Rs.4.78 and FY15EPS of Rs.6.63. The stock can be bought with a target price of Rs.60 (appreciation of about 29%) with the medium to long term investment horizon.
Judging by the target price given by Hem it appears most of the juice has been drained out by the early birds. However, it is worth keeping an eye on the stock for future gains
as looking at the market gitanjali gems is a good stock to buy as the stock has already toched 52 weeks low & now its wedding season from dec to feb. stock has moved from 51 to 66 and still stock will move further and will touch 100/-
THANK YOU