Tonira Pharma Ltd - Rs.18

Tonira Pharma Ltd. (TPL) was incorporated in 1992 with the object to take over the running business of M/s.Pharmachem Laboratories. Today, it is one of the well-known manufacturers of bulk drugs, drug intermediates and active pharmaceuticals ingredients (APIs). It exports 95% of its product to more than 80 countries worldwide and hence has been granted 100% Export Oriented Unit status by the Government of India. In the domestic market, its clientele include Dabur India, Cadila Laboratories, IPCA Laboratories, Nicholas Laboratories, Zandu Pharmaceuticals, Neuland Laboratories, Anglo-French, Glaxo India, etc.

TPL’s main manufacturing facility located at Ankleshwar in Gujarat has WHO GMP approval and is certified ISO 9001:2000 by BVQI. But to enter into the regulated market, the company has invested around Rs.15 cr. and set up a second unit in Vadodara, Gujarat, with an annual capacity of 80 metric tonnes of product mix. This facility was commissioned in July’05 and is USFDA compliant. It also invested around Rs.3 cr. to modernize and expand its Ankleshwar factory thereby taking the total production capacity to above 200 metric tonnes. Besides, TPL also has a state-of-the-art R & D Centre at Vadodara, which has a full-fledged pilot plant to carry out the transformation of laboratory processes into industrial manufacturing processes. It also provides dedicated facilities for contract research and manufacturing services (CRAMS) apart from undertaking contract synthesis both on an exclusive and non-exclusive basis. The company has already filed patent for three molecules and four Drug Master Files (DMFs) in CTD format and is further planning to file at least 4 to 5 DMF shortly. In future, it intends to enter into formulations, which is a more value added product as compared to API.

Inspections have already been carried out at its Vadodara plant and the company is in the process of getting necessary approvals of various regulatory authorities such as US FDA, MCA (UK) and TGA (Australia). Recently, it signed a contract with top two US-based generic companies - Apotex Corporation and Teva Pharmaceutical to supply four different API (of anti ulcer, anti-inflammatory, antihistamine and anti-allergic) drugs for a period of five years. This is a huge achievement and a major breakthrough for TPL to enter the US market.

For FY06, its sales increased by 30% to Rs.30 cr. but net profit improved by 5% only to Rs.2.50 cr. due to increased interest cost and depreciation. For the June’06 quarter, its reported quite encouraging numbers with double digit growth at a time when most of the other mid-cap pharmas disappointed. For FY07, it is estimated to clock a turnover of more than Rs.35 cr. with net profit of around Rs.3 cr., which could result in an EPS of Rs.4 on its current equity of Rs.7.90 cr. with a book value of around Rs.24 and current market cap of Rs.14 cr., this scrip is available fairly cheap and can easily appreciate by 50% in 12 months or so.