Dishman Pharma & Chemicals:Treading Cautiously :Karvy

Treading Cautiously
Dishman Pharmaceuticals & Chemicals (Dishman Pharma) is quite upbeat
for FY13E with several of the Company’s business engines gradually
falling in place. The commencement of Vitamin D3, Disinfectants and
Oncology unit would add to the additional revenues streams. Renewed
traction in Dishman Pharma would also aid the profitability. We upgrade
our EPS estimates and reiterate our “BUY” recommendation on the stock.

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Dishman Netherlands: Dishman Netherlands will clock Rs. 2.5 bn revenues
in FY13 as against Rs. 1.93 bn in FY12. The new Vitamin D3 plant will
contribute to the additional revenues coupled with firming up of cholesterol
prices from US$200/kg to US$275/kg. 25 % improvement in EBDITA is
envisaged on a y‐o‐y basis.
Carbogen Amicis: The Company has roped in its erstwhile CEO Mark
Griffith. The focus is on profitable business and not topline. All low‐value
products and APIs are transferred to India and Synprotec UK. The
Company’s revenues should move up from CHF 74 mn in FY 12 to CHF 85
mn in the current year.
Dishman India: Dishman India has 15 projects which are going on‐stream
and each project should contribute US$1‐3 mn. Dishman India revenues
should move up from Rs. 4.6 bn to Rs. 5.5 bn in FY13E. A new generic API
division (Oncology APIs ‐ initial focus) with a marketing strength of 15
people has been started to de‐risk from the volatile CRAMS revenues.
Outlook & Valuation
Dishman Pharma is confident of finishing the current year with revenues of
Rs. 12.5 bn and EBDITA to the tune of Rs. 2.65 bn. The first quarter results
may not be very good, as Solvay supplies will commence form 2nd quarter
onwards. We upgrade our EPS estimates for FY13E by 20% to Rs. 8.8 for
FY13E, mainly on account of lower depreciation and introduce FY14E EPS at
Rs. 13.7. We reiterate our “BUY” recommendation on the stock, while
revising the target price by 21% to Rs. 97 per share based 11xFY13E.