SMC Global has picked up Elder Pharmaceuticals as its techno-funda call. It has recommended to Buy around Rs 363.50 for target price of Rs 385-405 (duration: 2 months) and stop loss of Rs 345. The broking firm gave following rationale:
The company plans to launch eight new products in the country in varioustherapeutic areas, including gynaecology and pain management, in theremaining half of the current fiscal. It has already launched seven products so far in the current fiscal, which includesthree launched in the second quarter of FY12.
It plans to enter the Japanese pharma market during the current fiscal, as it has received accreditation from the Japanese Ministry of Health for its Patalganga facility. The company`s plant at Patalganga manufactures active pharmaceutical ingredients (APIs). This would open up another USD 500-million market for the company.
The company had recently announced the plans to increase its sales and marketing force by 1,000 in the next two years. The company is also planning to spend up to Rs 550 million in the next two years for increasing its manpower, mainly the sales force, updating its research and development facilities and for brand building exercises.
It is looking to expand in the over-the-counter (OTC) segment, in which it has almost negligible presence at present. The company is also looking to enhance presence in the functional foods market, leveraging on UK-based NutraHealth Care, a company specializing in neutraceutical products, which it had acquired last year.
The company`s Strategy is to target the Tier 2 and tier 3 cities with emphasis on improving the sales volume of Eldervit-12 in these areas. The Eldervit-12 is a nutrition product administered by the doctors. The company`s present Doctor Reach is at 35%.
The manufacturing facility at Langa road, Dehradun is currently contributing around Rs 50 million per month and going ahead expected to contribute about Rs 80 million sales per month.
Date: 8th december,2011