|
Quantamental
Equity Research on AARTI DRUGS LTD | Release: 20 Jan 2020 17:20:01 UTC+05:30
| Reporting Currency: INR | Trading Currency: INR | Exchange:NSE/BSE NSE
CODE:AARTIDRUGS and BSE CODE:524348 |
| Last Close: |
INR 616.15 |
| Fair Value: |
INR 829.05 |
| Est. Price by Mar 20: |
INR 658.7 |
| Market Capitalization (INR
Crs): |
1435.63 |
| Industry: |
Pharmaceuticals |
| Rating: |
STRONG BUY |
| Upside: |
35% |
| Company Profile |
|
| Aarti Drugs is primarily involved in manufacturing and
marketing of Active Pharmaceutical Ingredients (API), Pharma Intermediates
and Specialty Chemicals.(Source : 201903 Annual Report Page No: 93) |
| Compounded Annual Growth |
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| Particulars |
1-Year |
3-Year |
5-Year |
10-Year |
|
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|
|
|
| Revenue % |
28% |
11% |
8% |
12% |
|
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|
| EBIT % |
14% |
6% |
7% |
11% |
|
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|
|
| Earnings % |
19% |
10% |
7% |
13% |
|
|
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|
|
|
|
|
|
| Book Value
% |
20% |
14% |
16% |
14% |
|
|
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|
|
|
|
| Stock Total
Return % |
26% |
11% |
36% |
29% |
|
|
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|
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|
| Share holding
pattern |
| Particulars |
%age |
|
| (A) Promoter
& Promoter Group |
61.64 |
|
| (B) FII/FPI |
0.61 |
|
| (C)
DII/Insurance Companies |
4.74 |
|
| (D) Public holding < 2 lakhs of cap. |
18.18 |
|
| (E) Others |
14.83 |
|
| Grand Total |
100.00 |
|
|
| Fundamentals
(Historical and Estimated) |
| Particulars |
Mar-11 |
Mar-12 |
Mar-13 |
Mar-14 |
Mar-15 |
Mar-16 |
Mar-17 |
Mar-18 |
Mar-19 |
Mar-20 E |
Mar-21 E |
Mar-22 E |
Mar-23 E |
Mar-24 E |
| Price |
64 |
51 |
72 |
131 |
650 |
452 |
576 |
506 |
637 |
659 |
795 |
933 |
1065 |
1230 |
| Return on
Equity |
14% |
13% |
22% |
25% |
26% |
19% |
20% |
17% |
17% |
19% |
19% |
18% |
17% |
17% |
| Price to
Earning |
6.9 |
5.5 |
3.9 |
5.2 |
20.3 |
16.5 |
18.2 |
16.3 |
17.2 |
12.4 |
12.4 |
12.4 |
12.4 |
12.4 |
| EVTI |
0.7 |
0.6 |
0.6 |
0.7 |
1.8 |
1.4 |
1.7 |
1.5 |
1.3 |
1.1 |
1.1 |
1.1 |
1.1 |
1.1 |
| EVTIFM |
6.9 |
5.5 |
3.9 |
5.2 |
20.3 |
16.5 |
18.2 |
16.3 |
17.2 |
12.4 |
12.4 |
12.4 |
12.4 |
12.4 |
| Price to Book
Value |
1.0 |
0.7 |
0.8 |
1.3 |
5.2 |
3.1 |
3.6 |
2.8 |
2.9 |
2.4 |
2.4 |
2.3 |
2.2 |
2.1 |
| Debt to
Equity |
1.4 |
1.5 |
1.4 |
1.4 |
1.4 |
1.3 |
1.2 |
1.2 |
0.9 |
0.8 |
0.6 |
0.5 |
0.2 |
0.0 |
| Dividend Yield |
4% |
5% |
7% |
5% |
2% |
1% |
0% |
0% |
0% |
0% |
0% |
0% |
0% |
0% |
| Cash Flow to
Firm |
-1% |
-6% |
14% |
9% |
1% |
5% |
8% |
3% |
7% |
3% |
5% |
7% |
12% |
13% |
|
| Detailed Estimates |
| Title |
Mar-19 |
Mar-20 E |
Mar-21 E |
Mar-22 E |
Mar-23 E |
Mar-24 E |
|
| Sales |
1,454.25 |
1,761.26 |
2,062.15 |
2,331.38 |
2,541.85 |
2,668.94 |
|
| EBITDA |
209.02 |
255.35 |
298.97 |
338.00 |
368.52 |
386.94 |
|
| EBIT |
168.63 |
206.43 |
243.60 |
277.55 |
304.96 |
328.42 |
|
| PBT |
127.63 |
165.43 |
199.56 |
234.23 |
267.42 |
308.95 |
|
| NPAT |
87.26 |
124.07 |
149.67 |
175.67 |
200.57 |
231.71 |
|
| Price to
Earning |
17.22 |
12.37 |
12.37 |
12.37 |
12.37 |
12.37 |
|
| Price to Book
Value |
2.90 |
2.40 |
2.36 |
2.27 |
2.16 |
2.08 |
|
| Debt to
Equity |
0.91 |
0.79 |
0.63 |
0.45 |
0.19 |
- |
|
| Return on
Equity |
0.17 |
0.19 |
0.19 |
0.18 |
0.17 |
0.17 |
|
| Enterprise Value to Total Income (EVTI) |
1.34 |
1.14 |
1.12 |
1.10 |
1.05 |
1.05 |
|
| Enterprise Value to Total Income to Firm Margin(EVTIFM) |
17.93 |
13.74 |
13.42 |
13.07 |
12.35 |
12.04 |
|
| Price or Est.
Share Prices |
637.30 |
658.70 |
794.60 |
932.70 |
1,064.90 |
1,230.30 |
|
|
| DISCOUNTED CASH
FLOW |
| Title |
Mar-20 E |
Mar-21 E |
Mar-22 E |
Mar-23 E |
Mar-24 E |
|
| PBT |
165.43 |
199.56 |
234.23 |
267.42 |
308.95 |
|
| Interest |
41.00 |
44.04 |
43.32 |
37.54 |
19.47 |
|
| Depreciation |
48.92 |
55.37 |
60.45 |
63.56 |
58.53 |
|
| Cash Flow
Before Tax |
255.35 |
298.97 |
338.00 |
368.52 |
386.94 |
|
| Tax Rate |
25.00 |
25.00 |
25.00 |
25.00 |
25.00 |
|
| Cash Flow
After Tax |
191.51 |
224.23 |
253.50 |
276.39 |
290.21 |
|
| Terminal Cash
Flow |
- |
3,089.81 |
|
| Total Cash
Flow |
191.51 |
224.23 |
253.50 |
276.39 |
3,380.02 |
|
| Present Value of
Cash Flow (Mar-20 E) |
2,437.05 |
|
| Debt (Mar-20 E) |
505.42 |
|
| Value of Equity
(Mar-20 E) |
1,931.62 |
|
| Fair Value Per
Share (Mar-20 E) |
829.05 |
|
|
| Equity |
|
|
|
|
1,436 |
|
| Debt |
|
|
|
|
471 |
|
|
| Beta |
Take from Reuters |
|
|
1.61 |
|
|
|
|
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|
| Risk Free Rate |
Prevailing Yield in India |
|
|
7% |
|
|
|
|
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|
|
|
| Market Risk Premium |
Assuming 8.82% premium
for Equity Investments |
7% |
|
|
|
|
|
|
|
|
|
|
| Interest Paid |
|
|
|
|
41 |
|
| Tax Benefit |
|
|
|
|
13 |
|
| Interest Net of Tax |
|
|
|
|
28 |
|
| Debt |
|
|
|
|
471 |
|
| Cost of Debt |
|
|
|
|
6% |
|
| Cost of Equity |
|
|
|
|
19% |
|
| Debt Weight |
|
|
|
|
25% |
|
| Equity Weight |
|
|
|
|
75% |
|
| WACC |
|
|
|
|
16% |
|
|
| Cash Flow of Mar-24 E |
|
|
|
|
290.21 |
|
| Growth |
|
|
|
|
5.0% |
|
| Present Value of Terminal
Cashflow |
|
|
|
|
3,089.81 |
|
|
| Peer Comparision |
| # |
Name |
CMP
Rs. |
Mar
Cap Rs.Cr. |
Debt
Rs.Cr. |
Cost
of Equity % |
Kd
before tax % |
WACC
% |
Beta |
P/E |
Ann.
ROE % |
CMP
/ BV |
PE/ROE |
PE/ROE/G |
|
|
| 1 |
Divi's Lab. |
1,899.00 |
50,412 |
13.53 |
17.71 |
7.50 |
17.71 |
0.78 |
38.47 |
25.21 |
7.12 |
1.53 |
-13.12 |
|
|
| 2 |
Lupin |
753.95 |
34,147 |
8,669.03 |
15.10 |
4.27 |
12.45 |
-0.46 |
37.99 |
-4.47 |
2.51 |
-8.51 |
-22.96 |
|
|
| 3 |
Jubilant Life |
548.70 |
8,741 |
4,487.78 |
27.51 |
6.89 |
19.80 |
1.12 |
11.35 |
24.78 |
1.67 |
0.46 |
2.99 |
|
|
| 4 |
Suven Life Scie. |
310.60 |
3,953 |
122.09 |
23.86 |
7.80 |
23.22 |
1.26 |
26.97 |
37.34 |
4.28 |
0.72 |
0.05 |
|
|
| 5 |
Granules India |
144.75 |
3,680 |
839.77 |
32.26 |
3.09 |
26.67 |
1.63 |
12.13 |
28.98 |
2.16 |
0.42 |
0.71 |
|
|
| 6 |
Shilpa Medicare |
269.35 |
2,196 |
226.34 |
17.49 |
2.28 |
16.04 |
0.54 |
20.62 |
21.08 |
1.75 |
0.98 |
0.79 |
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