Recommendation From Pharmaceuticals & Personal Products Sectors

The scrips in this column have been recommended with a 15-day investment horizon in mind and carry high risk. Therefore, investors are advised to take into account their risk appetite before investing, as fundamentals may or may not back the recommendations. 

STRIDES PHARMA SCIENCE 

CMP - Rs 514.15
BSE CODE 532531
Volume 215,410
Face Value Rs 10
Target Rs 575
Stoploss Rs 464 (CLS) 

Strides Pharma Science Ltd. develops and manufactures IP-led niche finished dosage formulations and is one of the world’s largest manufacturers of soft gelatin capsules. The company reported a consolidated net loss of Rs 8.70 crore in Q2FY19 as against net profit of Rs 11.73 crore in Q2FY18. With 26 ANDAs pending approval and addressable opportunities worth US$ 9.7 billion, the company has a robust approval momentum with eight approvals already received in FY19. The company entered into a strategic partnership with SUDA Pharmaceuticals on November 9, 2018, for an oral spray for the US market. In Q2FY19, it received acceptance for two key ANDAs under the newly introduced competitive generic therapy with a combined market of US$ 550 million. Its chief growth drivers are expansion in product portfolio and geographical expansion. In FY18, the company reported an adjusted EPS of Rs 14.6 per share and paid a dividend of Rs 2 per share. Thus, we recommend a BUY in this stock. 

EMAMI LTD. 

CMP - Rs 438.35
BSE CODE 531162
Volume 7,184
Face Value Rs 1
Target Rs 474
Stoploss Rs 422 (CLS) 

Emami Ltd. is a major personal and healthcare company which recorded a turnover of Rs 2,541 crore in FY17-18. In Q2FY19, its revenue from operations rose by a negligible 0.01 per cent YoY to Rs 628.02 crore. Profit plummeted 16.14 per cent YoY to Rs 82.68 crore. EPS dropped to Rs 1.82 in Q2FY19 from Rs 2.17 in Q2FY18. In H1FY19, Emami’s topline and EBITDA surged 9 per cent and 11 per cent, respectively, while its cash profits rose 10 per cent. In Q2FY19, its product Navratna Tel climbed 3 per cent, while the male grooming range grew 12 per cent. The pain management range declined 8 per cent. Kesh King range rose 2 per cent. 7 Oils in One and healthcare range grew 36 per cent and 1 per cent, respectively. BoroPlus range dropped 7 per cent. The international sales grew 4 per cent. Thus, we recommend a BUY in this stock. 

(Closing price as of Jan 15, 2019)