TAKE SOLUTIONS LTD- will you take it?

The business of LS ( not SCM) definitely is attractive but the key here how the Company is going to be successful in extracting the outsourcing from the top pharma majors. Some more points

1. On the strength of the considerable intelligence gathered, TAKE made the strategic decision of limiting its SCM activities to profitable segments while capitalizing on the growth potential of the LS industry and its USD 1.23 trillion Pharma & USD 289 billion Biotech markets.
2. SCM from Rs 166 cr in 2009 to Rs 212 cr in 212 ( CAGR 5%) and LS from Rs 156 cr to Rs 475 cr in 2015 ( CAGR 20%). 20% is a very god sign.
3. Life Sciences R&D spending is projected to grow 2.4 % per year from 2013 to 2020, reaching $162 billion.
4. TAKE Solutions’ Clinical Accelerators to reduce the time taken to standardize clinical trial data by over 50% (when compared to standardization without the accelerators), thus reducing time to market.
5. Experts joining LS vertical.

Source : Company AR
1. Depreciation is 30 yrs as Schedule II but I dont know the logic behind for 60 years. This is first time I am seeing a dep rate exceeding a rate as per Schedule II.
2. Ashish Dawan ( > 5% shareholder)has take an exit . he is from Chrysalis capital.
3. Working Capital requirement is huge and is consuming most of the operating CF. Further, CF is negative if you consider FA, Product Development and Goodwill.
4. They have intangible assets of Rs 100 cr and Rs 187 cr as Goodwill. Anyway, this can be ignored as it is accounting only. But on cashflow basis point no 3 is important.

Future potential is good provided we get improvement on 1) Cross Holdings 2) DSO 3) how they are going to tackle unattractive SCM 4) CF improvement from WC and Product development. FA and Goodwill, I am ignoring for the time being. 5)More details on how they are doing on acquisitions.

Rgds,