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Bilcare Limited is a Pune based company, engaged in specialty pharmaceutical
packaging solutions, research services, clinical services, and packaging systems. It
provides Brandpak solutions to enable product differentiation and marketing by
providing a unique brand identity to products, packaging films and materials for blister
packing. It is a leading producer in Asia with 62% share of Indian barrier blister
packing market. The company's key products include packaging films, aluminum
foils, wrap systems, cold formed blisters, closures and paper composites.
Recent acquisition to fuel the growth: Bilcare acquired plastic film making unit of petrochemical giant INEOS for the sum
of ` 6.07 bn (0.42x sales) this will provide access to over 1000 clients. With this strategic acquisition, Bilcare will be able to
cross sell its products to INEOS existing customers and provide an entry into non-pharma segments such as Food and non
food, furniture applications, cards businesses, printing /decoration, shrink films and visual packaging etc. Ineos films had a
production capacity of 140,000 tpa with turnover of ` 14.08 bn in CY09 employing around 1300 people across
manufacturing sites in Germany, Italy, India and USA.
Global Clinical Supplies: The company derives 15% of its revenues from this segment. Clinical trial process involves high
cost and time hence service providers like Bilcare can find large number of service seekers to reduce the time and cost of
the phase. Clinical services phase is a high margin segment with estimated total market to exceed $3 bn going forward, the
company is well positioned to tap this market by providing end to end clinical supply management services.
Bilcare technologies – nonClonableIDTM : Bilcare launched its brand protection technology nonClonableIDTM in US market
in FY10. This technology helps to mitigate revenue loss due to counterfeiting. This solution also finds application in the non
pharma areas such as museums, luxury and retail, heritage assets, wines, auto components and currency anticounterfeiting.
We believe that success in critical and mature market like US will be the key to its growth in future.
Valuation: At the CMP of ` 726, Bilcare trades at a P/E multiple of 10.9 and 7.4 on FY11E & FY12E consensus EPS
estimates of ` 66.7 and ` 97.9 respectively. On EV/EBITDA basis the stock is available at a multiple of 7.5 and 5.6 on
FY11E and FY12E consensus estimate. We recommend a “BUY” on the stock with short to medium term view.
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