Albert David - Rs.90.00

Incorporated in 1938, Albert David Ltd. (ADL) is a leading fast-growing and professionally managed pharma company in East India. Its core competency lies in the manufacture of bulk drugs, specialty formulations, herbal/ayurvedic products, disposable syringes & needles and intravenous (IV) solutions. In fact, it pioneered the use of FFS (form, filled & sealed) technology in IV Fluids & Human Placenta extract therapy in India. It has strong presence in various drug therapeutic segemnts like Immunomodulators, Vitamins & Nutritional Supplements, NSAIDs, Apetite Stimulants, Liver Protectives, Anti-Ulcerants, Laxatives, Anti-Arthiritic Preparations, Muscle Relaxants, and Adaptogenics to name a few. New formulations in gynaecology, gastroenterology, anti-diabetics, cardio-vascular, vitamins, anti-ulcer, anti-inflammatory and haematinics are also under consideration.

ADL has manufacturing facilities in Kolkata, Ghaziabad and in Madhya Pradesh, which are WHO GMP certified and accredited to ISO and/or USA FDA. It has technical collaboration with the world's largest manufacturer of amino acids, Ajinomoto Co. Inc. of Japan and with Roussel Morishita of Japan for manufacturing and marketing a wide range of crystalline amino acids, infusion solutions, oral solids and liquids in India. It has a well-organised and well-connected distribution network comprising over 1,25,000 retail outlets, 1600 stockists and 15 Sales Depots spread across the country backed by a 400+ highly trained and dedicated marketing team. Besides, its products are exported to Vietnam, Russia, Belarus, Egypt, Bangladesh, Kenya, Tanzania, Uganda, Sudan, Ethiopia, Nigeria, Zaire, Haiti, Brazil, Canada, USA, UK, Netherlands and Germany. Notably, some of its drugs are already approved by US FDA, UK MCA and European Council and it has DMF registration for bulk drugs like Tolbutamide and Chlorpropamide.

Last fiscal, ADL upgraded and expanded its Ghaziabad facility increasing the installed capacity for IV fluids to meet the robust domestic and overseas demand. Besides, it has already incurred around Rs.17 cr. to modernize and expand its other plants which are expected to be completed this year. In 2006-07, ADL has plans to launch some new products such as ‘Siocare’ (a gynaecological herbal product), ‘Placentrex Cream’ (human placenta extract for wound management), Drotaverine Tablets & Injectables (for management of smooth muscle spasm & colic pain) and a range of Cough Syrups for productive & non-productive cough for adults and children in its product portfolio.

For FY06, ADL’s sales were up by 25% at Rs.117 cr. and net profit increased by 75% to Rs.7.50 cr. For H1FY07, while sales grew by 10% to Rs.74 cr., net profit zoomed up 80% to Rs.10.70 cr. due to the write-back of depreciation. Interestingly, its profit margin improved by 300 basis points to 17% from 14% last year. Hence for FY07, it may report sales of Rs.150 cr. with net profit of Rs.11.25 cr. excluding extraordinary items. This would work out to an EPS of Rs.20 on its equity of Rs.5.70 cr. If we include the depreciation write-back, then the EPS bloats to around Rs.28. With its 52-week high/low at Rs.144/Rs.62, the ADL scrip has the potential to hit a new high. Investors can buy it with a price target of Rs.160 (75% return) in 15¬18 months.