Venus Remedies - Rs.78.00

Venus Remedies Ltd (VRL), a Chandigarh based pharmaceutical company, was incorporated in 1991 under the name ‘Venus Glucose Pvt. Ltd’ to initially manufacture large volume parenterals with a startup product range of 15 products. Since then, it has reshuffled its entire portfolio of products and is today a niche player in the pharma sector engaged in the manufacture of Super Speciality formulations in the Oncology & Cephalosporin segments. It has range of products comprising anti-cancer drugs, I.V Fluids, life saving drugs, fourth generation Cephalosporins, Super specialty products etc. It has set up a WHO-GMP certified plant with completely dedicated facilities for these formulations. It also does contract manufacturing for top drug manufacturing companies in the world.

In the last few months, it has already filed 4 patents and has another 10 patents to be filed with the Indian patent authorities, which would boost its top line in future. It has successfully launched 10 new formulations in the Oncology segment and Cephalosporin range during 2004-05 and is planning nearly a dozen launches during this fiscal. Recently, it successfully launched its brand ‘Ronem’, a premium Antibacterial for Critical Care, making it the only company in India to manufacture and market this product. It has also entered into marketing agreements with multinational companies for marketing and distribution of its products in the domestic market. It is also exports directly to Nepal, Ukraine, Yemen etc. For indirect exports to C.I.S. countries, Russia, Latin America and some African countries, VRL has tie-ups with some multinational concerns.

It is setting up an exclusive US FDA accredited manufacturing facility at Baddi in Himachal Pradesh to cater to the Super Speciality segments like Carbapenems, Anti-Cancer drugs in Lyophilized form, SVP injections in lyophilized form and injections in pre-filled Syringes. The complete Baddi Project will require capital expenditure (capex) of Rs.500 million to be completed in 4 phases in two years time. It is focusing on entering the Regulated Markets of U.S.A. and Europe in a big way. Work is already on for filing Drug Master Files (DMF) for three new formulations.

For year ended 31st March 2005, it reported very encouraging numbers. Net sales increased by 44% to Rs. 34 cr. and NP has more than tripled to Rs.4.10 cr. recording an EPS of Rs. 6.50. Due to a better margin product portfolio, its OPM improved from 11% to 16.50%. VRL has also declared an interim dividend of 10% for FY05. Considering the company’s dynamic growth prospects and new product launches, it can garner Net Sales of Rs.55 cr. with NP of Rs.7.5 cr. leading to an EPS of Rs.12 on its current equity of Rs.6.40 cr. If things go as per plans, it can even post an EPS of Rs.20 for FY07. A clear mulitbagger in the long run.