Bilcare - Initiating Coverage - Centrum

Initiating Coverage

Bilcare

Buy

Target Price: Rs339

CMP: Rs220         

Upside: 54%

Technology driven growth

Bilcare is the leading provider of research based innovative packaging solutions with specialisation in pharma packaging. With the acquisition of Ineos film business in Sept’10 the client base has expanded from 600 to 2,500. The company is the global leader in pharma packaging with plants in 11 locations across the globe. Bilcare recently sold part of its GCS business for US & Europe for $61mn (Rs3.36bn). The part of the proceeds are likely to be used to retire debt. We initiate coverage on Bilcare with a target price of Rs339 (based on 3x FY14E EPS of Rs112.9).

Bilcare Ltd (BL) ::Event based high risk, high return call:: HDFC sec

Company Background
Bilcare Ltd (BL) is India’s leading packaging solutions provider with over 60% market share. BL is also among the top 3
packaging companies in the world. BL is a research driven, geographically diverse organization with a presence in Pharma
Packaging Innovations (PPI), Global Clinical Supplies (GCS) and nonClonable ID Technologies. Packaging film solutions,
specialty film solutions and card solutions are part of the PPI business. PPI accounts for over 90% of BL’s revenue. BL was
founded in 1995 and was listed on the bourses in October 2004. BL has manufacturing and/or R&D facilities in India, Singapore,
UK, USA, Germany and Italy.
The comprehensive range of BL’s innovative packaging consists of blister films, aluminium foils, cold-formed blisters and wrap
systems. Its clientele includes most large pharmaceutical companies including Ranbaxy, Dr Reddy’s Laboratories, GSK, Wyeth,
Novartis and Aventis among others. At the end of FY12, BL had 20 subsidiaries and one 50:50 JV with USA based
MeadWestvaco Corp. The subsidiaries are spread across the world with most operating in the PPI space. The JV, International
Labs was entered in July 2008 with a Rs. 37 cr investment. International Labs is also into packaging solutions and supplies
largely to Walmart’s pharmacy division.
Over the years the company has expanded multifold initially through organic growth and lately via large acquisitions. In
September 2010, BL acquired INEOS’ global packaging films business, which has interests in Europe, USA and Asia. BL paid
~Rs. 600 cr for INEOS, which had sales of ~Rs. 1460 cr in that year, resulting in a price to sales multiple of ~0.4. However,
INEOS’ continued poor margins coupled with pressure on margins of domestic business in the past year have led to a drop in
BL’s performance. INEOS is a multi-billion dollar chemicals company and its packaging division was a small unit not in line with
the company’s headline operations. Hence INEOS sold the division to BL, an integrated packaging company that could gain
further from the synergies of the business. This purchase gave BL access to INEOS’ eight manufacturing facilities (3 in
Germany, 2 in Italy, 2 in India and 1 in the USA) and over 1900 customers.
The most recent development for BL was the sale of its global clinical supplies (GCS) businesses in the US and the UK to
United Drug plc for $61 mn (~Rs. 350 cr). BL has retained the Asian clinical supplies business. The funds received from the sale
are expected to largely repay loans and meet working capital requirements.

Bilcare Ltd. Q4 FY11 Update:: Sushil

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Q4 and FY11 Performance
During Q4 FY11, Bilcare Limited (BL) has posted 20.0% y‐o‐y growth in topline and 31.3%
EBITDA margins on standalone basis. During FY11, it has presented Consolidated numbers
including contribution from recently acquired films division of Ineos which has been
Consolidated for 7 months starting from Sept 2010. The Consolidated numbers are
therefore not directly comparable to prior year period.

Bilcare Limited- Diwali Mahurat Picks by India Capital Markets

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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.

Bilcare: Diwali Mahurat Pick by Anand Rathi

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Bilcare

• Innovation driven by R&D is key driver for growth of all the businesssegments. Another important growth area will be – Global Clinical services business
• Apart form domestic demand, major growth will come from US markets, where shifting from bottles to Blister packaging will boost demand for its products.
• Company is ready to tap this potential with required DMF filings and FDA approvals
• Company has developed anti counterfeit solutions in packaging using non clonable security technology (NST) which can revolutionize the packaging arena
• Company’s recent US acquisition INEOS is earnings accretive and will drive the top line and bottom line significantly
• We think stock is highly undervalued and deserves re-rating