We had discussed about Smruthi Organics Ltd (SOL) earlier and had highlighted about the consistent growth of 25%+ in this company and attractive valuations of just 6 times earnings. SOL has posted very good Q1 numbers and FY 2011 annual report also looks optimistic. The stock still looks attractive at CMP of 155.
|Particulars||June 11||June 10||% Variation||FY 2011|
Going by the strong Q1 results, it seems the company might be able to hit 200 Cr turnover for FY 2012 and post a NP of 12-13 Cr resulting into an EPS of 30-35.
Few highlights from FY 2011 annual report:
- During the year company has received the approval from US Food & Drug Administration (USFDA) for manufacture of API viz. Amlodipine Besylate, Carbidopa, Metformin Hcl, Norfloxacin and Telmisartan. This approval shall enable the company to export APIs to US, Canada and Eurpoe in a big way.
- R & D has been strengthened further by the recruitment of experienced scientists and upgrading the facilities from bench to production levels.
- Own product net sales grew by 31% and now contributes 48% of total sales. Contract Manufacturing also grew by about 30% and now contributes 52% of total sales.
- The Company is looking for promoting Metformin in bigger quantities since the product registered a growth rate of 18-20% world wide. To increase the Metformin Sales Company is creating new facilities with capacity of 3000 MT / Yr. apart from existing capacity of 2000 MT/Yr. The total capacity by end of the year 2011 will be 5000 MT/year which quite big capacity for utilization of these capacities. Company is working with many multi national companies and the progress is very promising. Post expansion, SOL will become one of the largest manufacturers of Metformin in the World.
SOL seems to be doing well and yet available at attractive valuations in the Pharma sector. Look forward to more discussion and feedback on this company.