Neuland Laboratories INITIATING COVERAGE By Systematix

Neuland Laboratories

A niche tranformation

Neuland Laboratories Ltd (Neuland) is a 30-year-old pharmaceutical company engaged in R&D, manufacturing and marketing of a wide range of bulk drugs, intermediates and custom synthesis of APIs (CMS). While catering to the generic and innovator customers in developed markets of the US, Europe and Japan (~88% of sales), Neuland has fast transformed its products basket into niche segments like ophthalmics, schizophrenia, anti-asthma, anti-fungals, anti-depressants and CNS among others. Given its two state of – the-art manufacturing facilities and R&D infrastructure, the company has developed a rich portfolio of over 75 products and has made over 652 regulatory filings, positioning itself among the most advanced API and CRAMS platforms in India. We expect revenue and profit CAGR of 23% and 64% over FY15-18e. We initiate coverage on Neuland with a Buy rating and target price of Rs1,050 (18x FY17e EPS).

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