shasun chemicals

-
Shasun Chemicals : Buy with a Price target of Rs. 90/- in 12months.

Shasun Chemicals & Drugs (Shasun) operates in three business areas -
Contract Research and Manufacturing Services (Crams), formulations and
complex chemical compounds used to manufacture APIs. We have a BUY
rating on Shasun on back of greater momentum in revenue and earnings
growth for the next two years due to increased benefits on account of
restructuring benefits and scaleup in the Contract Research and
Manufacturing Services (CRAMS) and Active Pharmaceutical Ingredients
(APIs) segments.

Shasun has added one innovator customer in its India business that
brought three early phase projects involving proprietary technology &
other innovator client in its UK business with phase II product line.
We estimate the innovative CRAMS segment to grow at a CAGR of 13.8%
from FY07 to FY09E to Rs.5.2bn with the scale-up of existing
contracts, signing of new contracts and increasing capacity
utilization.

Leasing of US-based lab to support CRAMS business: Shasun has leased a
lab in the US at Piscataway (near New Jersey) to support CRAMS
business involving an investment of USD 3mn. This is to develop APIs
for its US customers in the pre-clinical and clinical trial stages in
order to further strengthen the company's product portfolio.

The net revenues are expected to grow at a CAGR of 11.9% from
Rs.7.72bn in FY07 to Rs.9.67bn in FY09E on back of restructuring
benefits that would accrue mainly from CRAMS and API segments.

Shasun could be one of those who may be affected by Forex Derivatives
exposures and losses reported due to this could be utilized as an
opportunity to buy the stock at lower levels.

We have seen a sharp fall from levels of Rs 90+ in January to sub 40/-
levels in March. It is now consolidating in the range of Rs. 45 to Rs.
55/-. We have our diluted earnings estimates at Rs.7.41 in FY09E.
Currently, the stock is 7x on FY09E. We suggest a BUY with a price
target of Rs. 90 based on P/E of 13.5x FY09E (EPS Rs.7.41)

Popular posts from this blog

IOB capitalises on hike in stake by LIC

-
Indian Overseas Bank rose 1.53% to Rs 46.45 at 10:31 IST on BSE, after the biggest domestic instutional investors Life Insurance Corporation of India hiked its stake in the state-run bank. The bank made this announcement after trading hours on Wednesday, 25 March 2009. Meanwhile, the BSE Sensex was up 126.19 points, or 1.31%, to 9,794.09. On BSE, 31,003 shares were traded in the counter. The stock had an average daily volume of 1.93 lakh shares in the past one quarter. The stock hit a high of Rs 47 and a low of Rs 45.95 so far during the day. The stock hit a 52-week high of Rs 156.80 on 2 May 2008 and a 52-week low of Rs 37.55 on 9 March 2009. The mid-cap bank stock had underperformed the market over the past one month till 25 March 2009, falling 3.17% as compared to the Sensex's 8.60% rise. It had also underperformed the market in the past one quarter, declining 33.94% as compared to the Sensex's 1.04% rise. The bank's current equ The current price of ...
Read more

Lok Housing & Constructions builds on fund raising plans

-
Lok Housing & Constructions jumped 6.99% to Rs 107.90 at 11:20 IST on BSE ahead of a board meeting to consider fund raising options from both foreign and local market, including an institutional placement. Meanwhile, the BSE Sensex was down 50.50 points, or 0.30%, at 15203.73. On BSE, 1.86 lakh shares were traded in the counter. The scrip had an average daily volume of 4.74 lakh shares in the past one quarter. The stock hit a high of Rs 115 and a low of Rs 102 so far during the day. The stock had a 52-week high of Rs 390.50 on 1 January 2008 and a 52-week low of Rs 96.25 on 12 June 2008. The scrip had underperformed the market over the past one month till 12 June 2008, falling 26.55% compared to the Sensex's 10.18% decline. It had also underperformed the market in the past one quarter, falling 31.39% compared to Sensex's 3.24% fall. The small-cap housing projects developer has an equity capital of Rs 42.88 crore. Face value per share is Rs 10. The current...
Read more

Griffin Chemicals surges on re-listing

-
Griffin Chemicals was trading at Rs 29, up 2220% on re-listing after six years on Bombay Stock Exchange (BSE). The counter saw miniscule volume of 4769 shares. The stock opened at Rs 23, up 1740% against its last traded price of Rs 1.25 on 8 August 2002. The Griffin Chemicals stock was highly volatile today. It opened at Rs 23 and then rallied ahead to Rs 50 but soon eased to a low Rs 22. The surge in Griffin shares reminds of unprecedented rise in stock prices of KGN Industries on its re-listing day. KGN Industries, run by Ahmedabad-based Memon family, had re-listed at Rs 100 per share after nearly seven years in May 2008 this year. The stock had risen to a high of Rs 55,000.
Read more