NGL FINE-CHEM LIMITED

Result Update (PARENT BASIS): Q3 FY15

BUY

CMP

80.00

Target Price

92.00

APRIL 7th 2015

ISIN: INE887E01022

Index Details

SYNOPSIS

Stock Data

Sector
BSE Code
Face Value
52wk. High / Low (Rs.)
Volume (2wk. Avg. Q.)
Market Cap (Rs. in mn.)

Pharmaceuticals
524774
5.00
115.00/19.70
5669
494.24

NGL Fine-Chem Ltd is a manufacturer of

pharmaceuticals and intermediates for usage in
veterinary and human health.
In Q3 FY15, Net profit jumps to Rs. 14.30 million
an increase of 126.62% against Rs. 6.31 million in
the corresponding quarter of previous year.

Annual Estimated Results (A*: Actual / E*: Estimated)

YEARS

FY14A

Net Sales
EBITDA
Net Profit
EPS
P/E

788.68
103.20
45.28
7.33
10.92

FY15E

FY16E

854.37
116.74
64.73
10.48
7.64

The companys net sales registered 9.03%

increase and stood at a record Rs. 192.18 million
from Rs. 176.26 million over the corresponding
quarter of previous year.

960.31
137.78
68.59
11.10
7.21

Operating profit is Rs. 14.52 million as against Rs.

20.51 million in the corresponding period of the
previous year.

Shareholding Pattern (%)

The company has reported an EPS of Rs. 2.31 for

the 3rd quarter as against an EPS of Rs. 1.02 in the
corresponding quarter of the previous year.
For 9M end of FY15, the company registered a
growth of 8.70% in Net sales to Rs. 630.67 million
from Rs. 580.20 million for 9M ended of FY14.

1 Year Comparative Graph

Net profit grew by 38.03% to Rs. 54.55 million for

the end of 9M FY15 from Rs. 39.52 million for the
end of 9M FY14.
Net Sales and PAT of the company are expected to
grow at a CAGR of 20% and 33% over 2013 to
2016E respectively.
NGL FINE-CHEM LTD

BSE SENSEX

PEER GROUPS

CMP

MARKET CAP

EPS

P/E (X)

P/BV(X)

DIVIDEND

Company Name

(Rs.)

Rs. in mn.

(Rs.)

Ratio

Ratio

(%)

80.00
316.35
72.75
200.00

494.24
40265.80
381.40
18153.70

7.33
9.76
10.14
9.37

10.92
32.41
7.17
21.34

2.01
15.17
0.90
2.00

0.00
250.00
15.00
400.00

Ngl Fine-Chem Ltd

Suven Life Sciences Ltd
Natural Capsules Ltd
Unichem Laboratories Ltd

QUARTERLY HIGHLIGHTS (PARENT BASIS)

Results updates- Q3 FY15,
NGL

Fine-Chem

Ltd

is

manufacturer

of

pharmaceuticals and intermediates for usage in

veterinary and human health has reported its
financial results for the quarter ended 31st
December, 2014.

Rs. In million

Dec-14

Dec-13

% Change

Net Sales

192.18

176.26

9.03%

PAT

14.30

6.31

126.62%

EPS

2.31

1.02

126.62%

EBITDA

14.52

20.51

-29.21%

The company has achieved a turnover of Rs. 192.18 million for the 3rd quarter of the current year 2014-15 as
against Rs. 176.26 million in the corresponding quarter of the previous year. EBITDA of Rs. 14.52 million in Q3
FY15, a decrease of 29.21% against the corresponding period of last year. In Q3 FY15, net profit of Rs. 14.30
million against Rs. 6.31 million in the corresponding quarter of the previous year. The company has reported an
EPS of Rs. 2.31 for the 3rd quarter as against an EPS of Rs. 1.02 in the corresponding quarter of the previous year.

Break up of Expenditure

During the quarter, total Expenditure rose by 14 per cent mainly on account of increased cost of materials
consumed by 1%, other expenditure by 17% and Employees cost 5% are the primary attribute for the growth of
expenditure. Total expenditure in Q3 FY15 stood to Rs. 184.54 million as against Rs. 162.27 million in Q3 FY14.

(Rs in millions)
Break up of Expenditure
Q3 FY15

Q3 FY14

%
CHNG

Consumption of Raw
Materials

114.15

113.02

1%

Employees Cost

21.64

20.52

5%

Depreciation

6.58

6.36

3%

Other Expenditure

60.70

51.74

17%

COMPANY PROFILE
NGL Fine-Chem Ltd is a manufacturer of pharmaceuticals and intermediates for usage in veterinary and human
health. NGL Fine-Chem Ltd caters to various global companies to custom manufacture high quality
pharmaceuticals with reliability and flexibility. NGL Fine-Chem business is modelled around the changing
customer demands and their ability to offer value-added innovative solutions to meet and even exceed their
demands.
The companys commitment to quality production standards is evident in all their production processes and
laboratory procedures, from raw material procurement and testing, to the development and implementation of
production and laboratory standard operating procedures, to final product testing. NGL Fine-Chem Ltd is
committed to manufacture active pharmaceutical ingredients and intermediates of consistent quality at
affordable cost, to achieve customer satisfaction with the help of Quality Systems and continually trained
manpower. The plants at NGL Fine-Chem Ltd are designed for compliance with cGMP to produce quality
products. All production processes are developed and tested prior to production to ensure customers' quality
and production schedule standards are met.
Products
Animal

Homidium Chloride

Buparvaquone

Nitroxynil

Fenbendazole

Clorsulon

Toldimfos Sodium

Parvaquone

Butaphosphan

Atovaquone

Imidocarb Dipropionate

Triclabendazole

Lumefantrine

Human

Nitazoxanide

Intermdediate Products

4 Aminobenzamidine Dihydrochloride

Aceturic Acid

3 Aminobenzamidine Dihydrochloride

Clorsulon Intermediate

Finished Dosage Form

Diminazene Aceturate Granules

Homidium Chloride Tablets

FINANCIAL HIGHLIGHT (PARENT BASIS)

(A*- Actual, E* -Estimations & Rs. In Millions)

Balance Sheet as at March 31, 2013 -2016E

I.

FY13A

FY14A

FY15E

FY16E

a) Share Capital

30.89

30.89

30.89

30.89

b) Reserves and Surplus

169.26

214.55

279.28

347.87

Sub-Total-Net worth

200.15

245.44

310.17

378.76

a) Long-term borrowings

31.55

33.63

26.23

23.61

b) Deferred Tax Liabilities [Net]

11.65

12.94

13.07

13.46

Sub-Total-Long term liabilities

43.20

46.57

39.30

37.07

a) Short-term borrowings

87.45

114.57

106.55

103.35

b) Trade Payables

116.20

116.25

177.86

213.43

c) Other Current Liabilities

16.42

22.99

26.21

28.83

d) Short Term Provisions

10.54

12.64

18.33

21.08

Sub-Total-Current Liabilities

230.61

266.45

328.95

366.69

473.96

558.46

678.41

782.52

175.47

186.42

184.56

199.32

EQUITY AND LIABILITIES:

A. Shareholders Funds

B. Non-Current Liabilities:

C. Current Liabilities:

TOTAL-EQUITY AND LIABILITIES (A+B+C)

II.

ASSETS:

D. Non-Current Assets:
Fixed Assets
i.

Tangible Assets

ii.

Intangible Assets

0.00

2.23

4.01

4.42

iii.

Fixed assets held for sale

0.00

0.00

40.70

0.00

175.47

188.65

229.27

203.74

5.87

15.24

0.00

0.00

181.34

203.89

229.27

203.74

a) Current Investments

0.42

4.15

7.55

9.06

b) Inventories

98.77

84.95

106.19

138.04

c) Trade Receivables

151.75

237.88

277.87

347.34

d) Cash and Bank Balances

15.29

7.27

32.35

54.23

e) Short Term Loans and Advances

18.57

19.21

20.17

22.59

f)

7.82

1.11

5.01

7.52

292.62

354.57

449.14

578.78

473.96

558.46

678.41

782.52

a) Sub-Total-Fixed Assets
b) Long Term Loans and Advances
Sub-Total-Non-Current Assets
E. Current Assets:

Other Current Assets

Sub-Total-Current Assets
TOTAL-ASSETS (D+E)

Annual Profit & Loss Statement for the period of 2013 to 2016E
Value(Rs.in.mn)

FY13A

FY14A

FY15E

FY16E

Other Income
Total Income

12m
555.69
1.89
557.58

12m
788.68
0.86
789.54

12m
854.37
1.13
855.50

12m
960.31
1.41
961.72

Expenditure
Operating Profit
Interest
Gross profit
Depreciation
Exceptional Items
Profit Before Tax
Tax
Profit After Tax
Extraordinary Items
Net Profit
Equity capital
Reserves
Face value
EPS

-481.83
75.75
-11.80
63.95
-19.34
0.00
44.61
-15.35
29.26
-0.15
29.11
30.89
169.26
5.00
4.71

-686.34
103.20
-12.91
90.29
-23.20
0.00
67.09
-21.81
45.28
0.00
45.28
30.89
214.55
5.00
7.33

-738.76
116.74
-12.83
103.91
-26.07
-0.02
77.82
-24.31
53.51
11.22
64.73
30.89
279.28
5.00
10.48

-823.95
137.78
-13.21
124.57
-27.82
0.00
96.74
-28.15
68.59
0.00
68.59
30.89
347.87
5.00
11.10

Description
Net Sales

Quarterly Profit & Loss Statement for the period of 30 June, 2014 to 31 Mar, 2015E
Value(Rs.in.mn)

30-Jun-14

30-Sep-14

31-Dec-14

31-Mar-15E

3m
207.03

3m
231.46

3m
192.18

3m
223.70

Other income

0.18

0.26

0.30

0.39

Total Income
Expenditure

207.21
-168.25

231.72
-190.10

192.48
-177.96

224.09
-202.45

Operating profit

38.96

41.62

14.52

21.64

Interest

-3.52

-3.85

-2.68

-2.78

Gross profit

35.44

37.77

11.84

18.86

Depreciation

-8.92

-4.35

-6.58

-6.22

Exceptional Items

0.00

-0.02

0.00

0.00

Profit Before Tax

26.52

33.40

5.26

12.64

Tax
Profit After Tax

-9.11
17.41

-10.56
22.84

-2.18
3.08

-2.46
10.18

Extraordinary Items

0.00

0.00

11.22

0.00

Net Profit

17.41

22.84

14.30

10.18

Equity capital
Face value

30.89
5.00

30.89
5.00

30.89
5.00

30.89
5.00

EPS

2.82

3.70

2.31

1.65

Description
Net sales

Ratio Analysis
Particulars

Charts

FY13A

FY14A

FY15E

FY16E

EPS (Rs.)

4.71

7.33

10.48

11.10

EBITDA Margin (%)

13.63

13.09

13.66

14.35

PBT Margin (%)

8.03

8.51

9.11

10.07

PAT Margin (%)

5.27

5.74

6.26

7.14

P/E Ratio (x)

16.98

10.92

7.64

7.21

ROE (%)

14.62

18.45

17.25

18.11

ROCE (%)

29.79

32.11

32.24

32.75

Debt Equity Ratio

0.59

0.60

0.43

0.34

EV/EBITDA (x)

7.89

6.11

5.03

4.05

Book Value (Rs.)

32.40

39.73

50.20

61.31

P/BV

2.47

2.01

1.59

1.30

OUTLOOK AND CONCLUSION

At the current market price of Rs. 80.00, the stock P/E ratio is at 7.64 x FY15E and 7.21 x FY16E respectively.

Earning per share (EPS) of the company for the earnings for FY15E and FY16E is seen at Rs.10.48 and
Rs.11.10 respectively.

Net Sales and PAT of the company are expected to grow at a CAGR of 20% and 33% over 2013 to 2016E
respectively.

On the basis of EV/EBITDA, the stock trades at 5.03 x for FY15E and 4.05 x for FY16E.

Price to Book Value of the stock is expected to be at 1.59 x and 1.30 x respectively for FY15E and FY16E.

We expect that the company surplus scenario is likely to continue for the next three years, will keep its
growth story in the coming quarters also. We recommend BUY in this particular scrip with a target price of
Rs.92.00 for Medium to Long term investment.

INDUSTRY OVERVIEW
The Indian pharmaceuticals market is third largest in terms of volume and thirteen largest in terms of value, as
per a pharmaceuticals sector analysis report by equity master. The market is dominated majorly by branded
generics which constitute nearly 70 to 80 per cent of the market. Considered to be a highly fragmented
industry,consolidation has increasingly become an important feature of the Indian pharmaceutical market.
India has achieved an eminent global position in pharma sector. The country also has a huge pool of scientists
and engineers who have the potential to take the industry to a very high level. The UN-backed Medicines Patents

Pool has signed six sub-licences with Aurobindo, Cipla, Desano, Emcure, Hetero Labs and Laurus Labs, allowing
them to make generic anti-AIDS medicine Tenofovir Alafenamide (TAF) for 112 developing countries.
Outlook
The Indian pharma market size is expected to grow to US$ 85 billion by 2020. The growth in Indian domestic
market will be on back of increasing consumer spending, rapid urbanisation, raising healthcare insurance and so
on.
Going forward, better growth in domestic sales will depend on the ability of companies to align their product
portfolio towards chronic therapies for diseases such as such as cardiovascular, anti-diabetes, anti-depressants
and anti-cancers are on the rise.
Moreover, the government has been taking several cost effective measures in order to bring down healthcare
expenses. Thus, governments are focusing on speedy introduction of generic drugs into the market. This too will
benefit Indian pharma companies. In addition, the thrust on rural health programmes, life saving drugs and
preventive vaccines also augurs well for the pharma companies.

Disclaimer:
This document is prepared by our research analysts and it does not constitute an offer or solicitation for the
purchase or sale of any financial instrument or as an official confirmation of any transaction. The information
contained herein is from publicly available data or other sources believed to be reliable but we do not represent that
it is accurate or complete and it should not be relied on as such. Firstcall Research or any of its affiliates shall not be
in any way responsible for any loss or damage that may arise to any person from any inadvertent error in the
information contained in this report. Firstcall Research and/ or its affiliates and/or employees will not be liable for
the recipients investment decision based on this document.

Firstcall India Equity Research: Email info@firstobjectindia.com

C.V.S.L.Kameswari
U. Janaki Rao
B. Anil Kumar
M. Vinayak Rao
G. Amarender

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