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Report By: Vikash Kandoi

vikash@dynamiclevels.com

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Marksans Pharma
Health Care in Safe Hands
Company Overview and Stock price .3
Product Overview....4
Marksans Goa Plant...7
Marksans R&D.....8
Industry Outlook10
Company Financial.....13
Balance Sheet......14
Cash Flow.....15
Key Ratios....15
Peer Comparison......16
Shareholding Pattern....... 18
Investment Rationale..............19
Disclaimer20

Buy Price: Rs 49

Page 2

Target: 70

FY16P/E: 42

Source: Company, www.dynamiclevels.com

Companys Overview and Stock Price

Marksans Pahrman focus lies in the OTC & prescription drugs that have wideranging applications across fields like

EXCHANGE SYMBOL
Sector

Current Price * (Rs.)

Oncology

Face Value (Rs.)

Gastroenterology

52 Week High (Rs.)

Antidiabetic, Antibiotics

52 Week Low (Rs.)

Cardiovascular

Life Time high (Rs.)

Pain Management

Life Time low (Rs.)

Gynaecology

Average Daily Movement

Marksans R&D capabilities include dossier development, chemical synthesis,
process optimization, formulation development, analytical development and
conducting stability studies. The company has a team of over 50 experienced
scientists specializing in formulation development and analytical development.
The conpany has possessed end-to-end capabilities from Lab scale
development to Pilot scale up and from commercializing the product for large
scale manufacturing to marketing globally.

Average Volume [20 days]

1 Month Return (%)
Consolidated Trailing PE
Ratio
Book Value
Market Cap
% of Promoter holding
pledged

MARKSANS
PHARMA
53.75
1
113.90 (28-Dec15)
33.50 (01-Mar-16)
115.00 (10-Aug15)
0.87 (28-May-03)
3.25
5506566
31.7
45.77
10.79
2202.11 (Cr)
0

The company has achieved global recognition within a very short span of time
and has major global expansion plans for the near future.

This is a weekly chart of Marksans Pharma

showing the stock has gain momentum from
40 levels and giving breakout of 53 levels.
The table is showing NSE Index performance sorted on 1 Month
percentage change

NIFTY AUTO INDEX

4.32

15.68

27.16

1Year
%
32.27

3.47

6.25

10.43

-7.26

2.95
2.41

16.68
12.18

31.68
25.64

27.46
14.97

2.27
2.23

11.10
13.87

25.45
18.02

13.73
31.30

NIFTY PHARMA
INDEX
NIFTY MEDIA INDEX
NIFTY FINANCE
INDEX
BANK NIFTY
NIFTY ENERGY
INDEX
NIFTY REALTY INDEX

1.72

7.34

40.01

19.71

8
9
10
11

NIFTY
NIFTY METAL INDEX
NIFTY IT INDEX
NIFTY FMCG INDEX

1.60
-0.03
-0.24
-1.24

6.60
20.39
-6.30
2.41

15.11
38.63
-6.79
13.12

11.50
60.64
-12.67
12.55

3
4
5
6

Symbol

1Month%

3Months%

6Months%

Pharma index has underperformed in 3 months, 6 months and 1 year. But

started performing from last 1 month and has become 2nd Top performing
Index.

Page 3

Source: Company, www.dynamiclevels.com

Product overview
Marksans Pharma has established world-class formulation
manufacturing facilities by leveraging state-of-the-art technology,
incorporating best practices and adhering to stringent regulatory
compliances. These are Centers of Excellence committed to
creating the highest quality products.

Marksans
has
focused
towards
formulation development and have a
strong back up in terms of R&D and
aggressive marketing plans.

The company has highly sophisticated manufacturing plant in Goa

is spread over a sprawling 18,000 sq. m. It is home to cuttingedge product innovation and formulation development processes
that cater to global needs.
Manufacturing facility at Goa has advanced infrastructure and
automated manufacturing and packaging lines that are specially
designed to meet global statutory requirements.
The plant is approved by regulatory bodies such as:

U S Food and Drug Administration (US FDA)

Therapeutic Goods Administration (TGA)
Medicines and Healthcare products Regulatory Agency
(MHRA) - United Kingdom
Marksans have a WHO GMP certificates

Marksans Pharma has

highly sophisticated
manufacturing plant in
Goa is spread over a
sprawling 18,000 sq.
m.

The company manufactures a wide range of solid oral dosage in

the form of:

Tablets (plain, enteric coated and film coated)

Hard Gelatin Capsule
Soft Gelatin Capsules

Market: Unites States (US)

The US pharmaceutical market is one of the key focus areas for
Marksans Pharma. The company has achieved the required
approvals from the US FDA and has actively started exporting
formulation to US.

The US pharmaceutical
market is one of the key
focus areas for
Marksans Pharma.

The companys target is the technology driven niche liquid gel

market which is tapped by select players, thus providing
differentiation. Marksans offers innovative product offerings
through exclusive tie-ups, supply and marketing arrangements.

Page 4

Source: Company, www.dynamiclevels.com

Europe
Led by Marksans subsidiaries Bell, Sons & Co (Druggists) Ltd. and
Relonchem Ltd., Marksans Pharma Ltd. has established a strong
foothold in the European markets. They have a strong presence in the
OTC and formulations space and continue to leverage their strengths in
manufacturing and distribution.
Marksans Pharma is engaged in supply of pharmaceutical products to
clients such as Boots, Almus, Actavis, Teva, Genepharma and Mylan.
In addition, they also assist requirements such as Dossier development,
Filing and Commercial Supply to European Customers.

Marksans
Pharma
Ltd
product list contains 79
products in Europe

South East Asia

Marksans started operations in the Asian region in 2008. The vast and
diverse Asian continent has been the focal point of Marksans
international operations. With 300+ product registrations covering 9
countries, Marksans has a vantage position in the Asian region.
Backed by a strong product portfolio and a highly promising pipeline of
pending product registrations, Marksans is well positioned to realize the
true potential of these markets. Their aim is to reach out to different
territories in the worlds largest continent by offering pharmaceutical
products encompassing a wide range of therapeutic indications with
impeccable quality at par with international standards.

Africa
The African market presents extensive opportunities for Marksanss
international operations. With 40 product registrations, Marksans is
consolidating its position in the African region. The company has a
strong product portfolio for these markets are has plans for offering a
comprehensive array of products in the near future.
The company aspires to gain a strong foothold in this region by offering
high quality and value-based pharmaceutical products, which are at par
with international standards.

Marksans Pharma has 300+

products registrations covering
9 countries with advantage
position in the Asian region

Key Brands In Africa

Clavmark
Furomark
Ampimark
Amoxmark
Leximark

Russia & CIS

Page 5

Source: Company, www.dynamiclevels.com

Marksans Pharma is currently exporting its products to CIS and Russia.

Their focus is to leverage their strengths in research, IP and
manufacturing to build strategic alliances and to increase presence and
participation in these markets.
The Company remains committed to growing their presence in these
markets by delivering high quality products at affordable prices and
constantly upgrading their offerings. In addition, introduction of newer
products in existing markets and entry in new territories will impel their
growth in these markets.

Latin America
Marksans aims to penetrate the Latin American market with its high
quality products and extensive product portfolio. Strong economic
performance in this region is expected to fuel growth in the coming
years. In addition, recent regulatory developments will create further
market opportunities in the country, particularly for generic producers
in both the private and public sectors.
In Ecuador, the pharmaceutical industry is expected to perform well in
the coming years, with strong growth in production, sales, exports and
employment. Pharmaceutical companies, however, are encouraged to
act in smaller Latin American markets to maximize their full regional
sales potential.
Generics consumption in Latin America is high. Marksans Pharma is
currently operating in Central America, South America & Caribbean
Islands with 15 products registered and 70 products are submitted to
MOH (Ministry of Health).

Areas of Operations
Russia
Ukraine
Kazakhstan
Georgia
Moldova

Areas of Operations
Ecuador
Jamaica
Nicaragua
Central America
South America
Caribbean Islands

Australasia
Areas of Operations
Marksans has gained a foothold in the prestigious Australasia markets
through its acquisition of Nova Pharmaceuticals Australasia Pty Ltd. in
2005. They are now a prominent distributor to popular retail brands in
the region.
Through Nova, Marksans now holds 30 MAs and has become one of the
biggest suppliers of generic products here. They continue to grow
rapidly and expand into key therapeutic classes. They are leveraging
this opportunity and reaching out to the New Zealand pharmaceutical
market as well.

Page 6

Analgesics
Anti allergy
Antibacterial
Antibiotic
Antiulceratives
Hypertension

Source: Company, www.dynamiclevels.com

About Marksans Goa Plant

Marksans Pharmas premier manufacturing and R&D facility is located
at Goa, India. The formulation plant here is spread across an 18,000
square feet campus. The plant is a 100% EOU has been designed to
accommodate rapid future expansion.
The entire facility has been built to adhere to the US FDA guidelines
and has been approved by various international bodies such as US FDA,
UK MHRA, Australian TGA and ANVISA (Brazil). The facility houses
a pilot manufacturing plant and has also received recognition from the
Department of Scientific and Industrial Research (DISR).
This facility is one of the biggest manufacturing facilities for soft
gelatin capsules and tablets in Asia.
The plant has fully automated packaging capabilities. In addition, the
plant also has an R&D centre that comprises of three key divisions for
formulation development, devising analytical methods and conducting
stability studies.
Marksans Pharma has another manufacturing facility at a multi-purpose
UK MHRA licensed factory in Southport, UK. This setup is primarily
engaged in manufacturing non-sterile liquids, ointments and powder
products.
The companys production lines have the following manufacturing
capacities and capabilities:

Oral liquids in batches up to 8000liters

Non-oral liquids up to 3000liters
Blended powders up to 800kilograms
Ointments up to 400kilograms
Liquid packaging - from 5ml up to 5liters (bottles)
Ointments and powders packaging 5g to 5kg
(containers)
Powder filling 5g to 20g (sachets)

In addition, they also have a fully-staffed development laboratory and

have the capability to develop and improve formulations. Their
Regulatory Department provides the necessary in-house support with
respect to regulatory affairs, license variations and applications.

Page 7

Source: Company, www.dynamiclevels.com

Marksans R&D
THE CONTRACT RESEARCH AND MANUFACTURING
SERVICES (CRAMS)
Marksans have completely integrated R&D, technology and engineering
capabilities that enable us to be cost effective partners on a sustainable basis.
They have built strong alliances and continuing relationships with top global
generic companies to offer R&D and formulation development services.
The Contract Manufacturing Division is being set up to address the challenges
and opportunities created due to increasing R&D costs, low R&D productivity,
impending patent expirations and at the same time, pressure to reduce
healthcare costs. This in turn has propelled global pharma majors to cut costs
and improve overall profitability. This is expected to translate into a strong
outsourcing potential for low cost manufacturing destinations like India.

INDIA OFFERS THE FOLLOWING ADVANTAGES TO

INNOVATOR COMPANIES

Strong chemistry skills as demonstrated in the domestic market

Low labour cost (1/7th ) compare to that in USA
Lower cost of manufacturing (30-40%) as compared to western
countries with same quality
Integrated business model creating a 'one stop' shop for
innovators
India has six times the number of trained chemists as the US,
which are available at 1/10th of the cost
India has over 75 USFDA approved plants (the highest no. of
FDA approved plants outside the US)
Abundant English speaking skilled manpower
High quality telecom and IT infrastructure
Indian companies have better regulatory skills like IPR
adherence

WHY MARKSANS PHARMA CRAMS?

The Compnay have long-term (7-10

years) licensing agreements with
several companies for development
and supply of products
Global presence
Low cost manufacturing base
World class manufacturing
capacities/ plant, huge capacities
Approvals from Global Health
Authorities like US FDA, UK
MHRA, Australia TGA
Strong R&D and dossier
development capabilities
More than 125 plus product IP for
regulated markets
More than 500 plus product IPs in
semi-regulated markets
Only company in India having
USFDA/ TGA/ MHRA approval for
softgel products
Among the very few companies in
India offering CRAMS for US/
global markets into formulation
development and manufacturing

STRATEGY

The company plans to enhance its

product portfolio with the addition of
12-13 products every year

Offering CRAMS for existing and

emerging markets is envisaged as one
of the major driver and revenue
earner for the company

Marksans Pharma has alliances with the top MNC generic

companies for contract manufacturing of 30 generic products
for the European markets

Page 8

Source: Company, www.dynamiclevels.com

Out Licencing
Marksans is committed to developing new drugs and has
embarked on forging out-licensing agreements with other global
pharmaceutical majors.
They are actively seeking out-licensing arrangements and
strategic partnerships with international specialty pharmaceutical
companies focused on the marketing of generic pharmaceuticals
to enter new segments and grow in these markets.

OUT-LICENSING IN INDIA

Out-licensing is a relatively new phenomenon in the Indian

pharmaceutical sector. Very few Indian companies have the
required in-house facilities to develop patented products.
An out-licensing strategy can make a critical drug globally
accessible, and technology collaboration can enable an
experimental drug to make it to the market quicker. This is also
significant in the global pharmaceutical sector, as development of
new drugs and out-licensing allows their partners access to a
diverse selection of the most sought after drugs and research
compounds.

WHY MARKSANS FOR OUT-LICENSING?

Marksans has state-of-the-art research facilities, equipped with the

latest infrastructure, which are led by highly qualified scientists
from institutions having international recognition. This facilitates
us to develop new generation drugs, formulations and novel drug
delivery vehicles, as per international standards and regulations.

Page 9

Source: Company, www.dynamiclevels.com

Industry Outlook
REASONS TO INVEST
India is expected to rank amongst the top three pharmaceutical
markets in terms of incremental growth by 2020.
India will become the sixth largest market globally in terms of
absolute size by zero.
Indias generic drugs account for 20% of global exports in
terms of volume, making the country the largest provider of
generic medicines globally.
Indias cost of production is significantly lower than that of the
USA and almost half of that of Europe.
A skilled workforce as well as high managerial and technical
competence.
Economic prosperity is likely to improve affordability for
generic drugs in the market.
Approval time for new facilities has been drastically reduced.

Following the introduction of product

patents,
several
multinational
companies are expected to launch
patented drugs in India.
The purported rise of lifestyle
diseases in India is expected to boost
industry sales figures.
Over USD 200 Billion is to be spent
on medical infrastructure in the next
decade.
Rising levels of education are set to
increase
the
acceptability
of
pharmaceuticals.
Indias patient pool is expected to
increase to over 20% in the next 10
years, mainly due to the rise in
population.

STATISTICS

The countrys pharmaceuticals industry is expected to account

for about 3.1-3.6% of the global pharma industry by value and
currently accounts for 10% by volume, by 2016.
Industry revenues are expected to expand at a CAGR of 12.1%
during 2012-20 and reach USD 45 Billion.
The healthcare sector in India is expected to grow to USD 250
Billion by 2020 from USD 65 Billion currently.
The generics market is expected to grow to USD 26.1 Billion by
2016 from USD 11.3 Billion in 2011.

FDI POLICY

GROWTH DRIVERS

Between 2011 and 2016, patent drugs worth USD 255 Billion
are estimated to go off-patent leading to a huge surge in generic
product and tremendous opportunities for companies.
By 2020, it will grow to USD 11 billion - a CAGR of 18%, with
the potential to reach USD 13 billion - at an aggresive CAGR of
20%.
With increasing penetration of chemists, especially in rural
India, OTC drugs will be readily available.
Pharma companies have increased spending to tap rural markets
and develop better infrastructure. The market share of hospitals
is expected to increase from 13.1% in 2009 to 26% in 2020.

Page 10

100% Foreign Direct Investment

(FDI) is allowed under the automatic
route for Greenfield projects.
For brownfield project investments,
up to 100% FDI is permitted under
the government route.
The government may incorporate
appropriate conditions for FDI in
brownfield cases, at the time of
granting approvals.
Non-compete clauses are not
allowed
except
in
special
circumstances, with the approval of
the Foreign Investment Promotion
Board.
The FDI is subject to applicable
regulations and laws.

Source: Company, www.dynamiclevels.com

SECTOR POLICY
The National Pharmaceutical Pricing Policy, 2012 (NPPP-2012)
has been notified on December 7, 2012.

Companies engaged in manufacture having

an in-house R&D centre:

The salient features of the NPPP-2O12 are as under:

The regulation of prices of drugs on the basis of the

essentiality of drugs as specified under the National List
of Essential Medicines (NLEM)- 2011.
The regulation of prices of drugs on the basis of
regulating the prices of formulations only.
The regulation of prices of drugs on the basis of fixing the
ceiling price of formulations through Market Based
Pricing.
The provision of exemptions to drugs manufactured
through indigenous R&D from price control for five
years.
A Drug Price Control Order 2013 has been notified in
May 2013 to implement the provisions of NPPP-2012.

FINANCIAL SUPPORT
KEY PROVISIONS IN THE 2O15-16 UNION BUDGET:

The threshold limit for applicability of transfer pricing

regulations to specified domestic transactions increased
from INR 0.05 billion to INR 0.2 Billion.
Service Tax exemption for common effluent treatment
plant operators.
Rate of income tax on royalty and fees for technical
services reduced from 25% to 10% to facilitate
technology inflow.
Time limit for taking CENVAT credit on inputs and input
services have been increased from six months to one year.

Weighted tax deduction of 200% under

section 35 (2AB) of the Income Tax Act for
both capital and revenue expenditure
incurred on scientific research and
development. Expenditure on land and
buildings are not eligible for deduction.
A national centre to help develop bulk
drugs and facilitate their research is being
set up in Hyderabad.
Duty free import of Pharmaceuticals
reference standards.

INVESTMENT OPPORTUNITIES

India is expected to be the third largest

global market for active pharmaceutical
ingredients by 2016, with a 7.2% increase
in market share.
Indian pharma companies registered 49%
of overall DMF filed in the US in 2012.
The Contract Research and Manufacturing
Services industry estimated at USD 8
Billion in 2015, up from USD 3.8 Billion in
2012. The market has more than 1000
players.
The formulations industry India is the
largest exporter of formulations with 14%
market share and ranks 12th in the world in
terms of export value. Double-digit growth
is expected over the next five years.

R&D BENEFITS:
FOREIGN INVESTORS
Industry/private sponsored research programmes:

A weighted tax deduction is given under section 35

(2AA) of the Income Tax Act.
A weighted deduction of 200% is granted to assess for
any sum paid to a national laboratory, university or
institute of technology, or specified persons with a
specific direction provided that the said sum is used for
scientific research within a programme approved by the
prescribed authority.

Page 11

Teva Pharmaceuticals (Israel)

Nipro Corporation (Japan)
Procter & Gamble (USA)
Pfizer (USA)
Glaxo Smith Kline (UK)
Johnson & Johnson (USA)
Otsuka Pharmaceutical (Japan)
AstraZeneca (Sweden-UK)

Source: Company, www.dynamiclevels.com

Company Financials
Jun-16

Mar-16

Dec-15

Sep-15

Jun-15

Mar-16

Quarterly
186.75
0.01

Quarterly
210.23
6.45

Quarterly
217.41
0.10

Quarterly
255.53
0.01

Quarterly
210.16
2.30

Annual
893.33
8.87

Total Income From Operations

Increase/Decrease in Stocks
Consumption of Raw Materials
Purchase of Traded Goods
Employees Cost
Depreciation
Other Expenses

186.76
-16.50
91.32
34.97
38.26
4.82
30.44

216.68
1.59
96.40
46.78
31.11
8.36
30.04

217.51
1.99
75.20
33.89
36.54
9.76
39.30

255.54
3.03
96.70
36.58
36.53
5.48
31.33

212.46
-1.77
72.97
46.33
18.24
4.52
24.28

902.19
4.84
341.27
163.58
122.42
28.13
124.95

Total Expenditure
Operating Profit
P/L Before Int., Excpt. Items & Tax
Interest
P/L Before Exceptional Items & Tax
P/L Before Tax
Tax
P/L After Tax from Ordinary Activities

183.31
3.45
3.45
1.28
2.17
2.17
0.30
1.87
1.87

214.28
2.40
2.40
1.97
0.43
0.43
4.38
-3.95
-3.95

196.69
20.82
20.82
2.34
18.48
18.48
-0.17
18.66
18.66

209.64
45.90
45.90
2.87
43.03
43.03
7.33
35.71
35.71

164.58
47.88
47.88
2.98
44.90
44.90
12.57
32.34
32.34

785.19
117.01
117.01
10.16
106.85
106.85
24.11
82.74
82.74

-0.85
1.02

-1.81
-5.76

-0.72
17.93

-0.83
34.87

-0.87
31.47

-4.23
78.51

40.93
--0.05

40.93
400.89
---

40.93
--0.46

40.93
--0.87

40.93
--0.79

40.93
400.89
-2.02

Net Sales/Income from operations

Other Operating Income

PAT
Minority Interest
Net Profit/(Loss) For the Period
Equity Share Capital
Reserves
Equity Dividend Rate (%)
EPS (Rs.) [After Extraordinary items]

Companys revenue has fallen by 11.16% QoQ from Rs. 210.23 crs to Rs. 186.75 crs.
Companys total expenditure has gone down drastically from Rs. 214.28 crs to Rs. 183.31 crs almost
14.45%.
Company has lower down its interest outgo.
From loss company has posted positive result. From Rs. -5.76 crs to Rs. 1.02 this can be turnaround
for the company.

Balance sheet

Page 12

Source: Company, www.dynamiclevels.com

In Cr.

Mar-16

Mar-15

Mar-14

Mar-13

Mar-12

12 mths

12 mths

12 mths

12 mths

12 mths

40.93

40.93

38.53

38.53

36.78

EQUITIES AND LIABILITIES

SHAREHOLDERS FUNDS
Equity Share Capital
Preference Share Capital

12.5

12.5

13.5

13.5

13.5

Total Share Capital

53.43

53.43

52.03

52.03

50.28

Reserves and Surplus

369.27

304.75

107.89

57.95

-239.52

Total Reserves and Surplus

369.27

304.75

107.89

57.95

-239.52

1.16

422.7

358.18

159.92

109.98

-188.08

19.82

7.88

15.2

Deferred Tax Liabilities [Net]

0.31

0.5

1.87

2.22

12.59

Total Non-Current Liabilities

0.31

0.5

21.68

10.1

27.79

Short Term Borrowings

40.62

43.52

58.06

75.31

77.18

Trade Payables

31.41

44.58

40.5

29.86

29.48

0.68

39.88

73.59

75.05

294.43

38.49

40.45

22.68

9.95

5.12

111.19

168.43

194.83

190.17

406.22

534.2

527.11

376.43

310.25

245.93

Tangible Assets

90.32

77.72

49.39

50.29

48.96

Intangible Assets

7.15

12.29

17.43

22.56

27.7

97.47

90.01

66.82

72.85

76.66

231.44

67.62

67.62

67.62

23.51

1.25

0.83

1.5

1.2

3.95

330.16

158.45

135.93

141.67

104.12

43.74

51.03

55.61

51.32

40.25

133.41

124.63

112.38

91.42

74.19

3.13

167.54

33.37

0.41

17.58

23.76

25.46

39.14

25.43

9.78

204.04

368.66

240.5

168.57

141.81

534.2

527.11

376.43

310.25

245.93

Money Received Against Share Warrants

Total Shareholders Funds
NON-CURRENT LIABILITIES
Long Term Borrowings

CURRENT LIABILITIES

Other Current Liabilities

Short Term Provisions
Total Current Liabilities
Total Capital And Liabilities
ASSETS
NON-CURRENT ASSETS

Fixed Assets
Non-Current Investments
Long Term Loans And Advances
Total Non-Current Assets
CURRENT ASSETS
Inventories
Trade Receivables
Cash And Cash Equivalents
Short Term Loans And Advances
Total Current Assets
Total Assets

Page 13

Source: Company, www.dynamiclevels.com

Cash Flow
Product Name

Mar-16

Net Profit/Loss Before Extraordinary Items And

Tax
Net Cash Flow From Operating Activities
Net Cash Used In Investing Activities
Net Cash Used From Financing Activities
Foreign Exchange Gains / Losses
Adjustments on Amalgamation / Merger / Demerger /
Others
Net Inc/Dec In Cash And Cash Equivalents
Cash And Cash Equivalents Begin of Year
Cash And Cash Equivalents End Of Year

Mar-15

Mar-14

Mar-13

Mar-12

-29.61

22.42

23.93

107.81

74.94

74.53
-61.82
-12.79
0.00
0.00

48.34
-50.22
-18.37
0.00
0.00

62.97
-225.52
116.45
0.00
0.00

106.31
-241.51
187.12
0.00
0.00

76.26
-40.14
-11.09
0.00
0.00

-0.08
22.50
22.42

-20.26
42.76
22.50

-46.10
88.86
42.76

51.93
36.93
88.86

25.03
11.90
36.93

Company has a positive operating cash flow

Company has made some capital investment in last year

Ratio Analysis
Mar 16
Per Share Ratios
Basic EPS (Rs.)
Diluted EPS (Rs.)
Cash EPS (Rs.)
Book Value [ExclRevalReserve]/Share (Rs.)
Book Value [InclRevalReserve]/Share (Rs.)
Dividend / Share(Rs.)
Net Profit/Share (Rs.)
Profitability Ratios
PBDIT Margin (%)
PBIT Margin (%)
PBT Margin (%)
Net Profit Margin (%)
Return on Networth / Equity (%)
Return on Capital Employed (%)
Return on Assets (%)
Total Debt/Equity (X)
Asset Turnover Ratio (%)
Liquidity Ratios
Current Ratio (X)
Quick Ratio (X)
Inventory Turnover Ratio (X)
Dividend Payout Ratio (NP) (%)
Dividend Payout Ratio (CP) (%)
Valuation Ratios
Enterprise Value (Cr.)
MarketCap/Net Operating Revenue (X)
Price/BV (X)
Price/Net Operating Revenue
Earnings Yield

Page 14

Mar 15

Mar 14

Mar 13

Mar 12

1.75
1.75
2.11
10.02
10.02
0.12
1.75

1.64
1.64
1.86
8.45
8.45
0.12
1.64

1.44
1.44
1.67
3.80
3.80
0.10
1.44

1.03
1.03
1.25
2.50
2.50
0.00
1.03

-4.92
-4.70
-4.43
-5.48
-5.48
0.00
-4.92

31.43
27.31
25.58
19.96
17.42
16.89
13.38
0.10
67.04

29.29
27.07
23.83
16.54
19.41
18.70
12.73
0.13
76.94

27.66
24.91
20.08
17.64
37.94
30.59
14.75
0.53
83.66

25.19
20.66
15.39
20.58
41.02
32.96
12.75
0.86
61.98

-74.92
-86.56
-118.31
-117.12
0.00
112.96
-73.62
-0.46
62.86

1.84
1.44
8.19
8.09
6.71

2.19
1.89
7.95
8.62
7.60

1.23
0.95
5.66
8.63
7.47

0.89
0.62
3.75
0.00
0.00

0.35
0.25
3.84
0.00
0.00

1,941.02
5.28
4.61
5.28
0.04

2,411.90
6.22
7.30
6.22
0.03

980.81
2.93
6.30
2.93
0.06

246.55
0.78
1.56
0.78
0.26

148.99
0.39
-0.30
0.39

Source: Company, www.dynamiclevels.com

Peer Comparison
Company Name
AJANTA PHARMA
DISHMAN
GRANULES
UNICHEM
NATCO PHARMA
JB CHEMICALS
AARTI DRUGS
SYNGENE
FDC
MERCK
INDOCO REMEDIES
HIKAL
MARKSANS PHARMA
SHILPA MEDICARE
NEULAND LAB
SMS PHARMA
BLISS GVS
SUVEN
MOREPEN LAB

Last Price

52 Wk High

52 Wk Low

Net Profit

2074.90
237.75
122.80
271.80
619.75
371.95
638.65
487.70
222.60
712.00
330.30
205.35
54.85
559.40
1002.40
106.25
148.45
206.30
26.15

2091.00
228.00
164.40
334.10
702.65
396.20
647.90
523.90
274.35
818.00
362.00
216.35
113.90
612.90
1080.00
137.15
210.50
308.70
41.75

1101.05
127.95
101.40
188.50
390.00
228.00
431.60
317.45
165.00
620.00
232.90
107.05
33.50
355.00
491.00
58.80
79.05
144.30
13.35

119.55
45.51
31.87
25.77
47.43
49.86
19.94
59.80
48.97
17.90
19.79
10.96
1.87
24.14
9.71
9.15
27.44
32.58
4.01

Sales

Profit Margin

471.02
375.40
343.73
341.97
325.22
309.23
291.88
274.50
264.49
257.74
257.37
221.23
186.76
154.46
149.77
145.85
140.14
133.23
118.44

25.38%
12.12%
9.27%
7.54%
14.58%
16.12%
6.83%
21.79%
18.51%
6.94%
7.69%
4.95%
1.00%
15.63%
6.48%
6.27%
19.58%
24.45%
3.39%

Peer Comparison on leverage basis

Marksans Pharma has low profit margin in comparison to its peer companies. But company is trying

INSTRUMENT
AJANTA PHARMA
BLISS GVS
DISHMAN
FDC
GRANULES
HIKAL
INDOCO REMEDIES
JB CHEMICALS
MARKSANS PHARMA
MOREPEN LAB
NATCO PHARMA
NEULAND LAB
SHILPA MEDICARE
SUVEN
SYNGENE

Price
2074.90
148.45
237.75
222.60
122.80
205.35
330.30
371.95
54.85
26.15
619.75
1002.40
559.40
206.30
487.70

Avg. Volume
157848
266067
2444623
186156
1408629
103960
139679
301048
5889339
2848590
177783
18853
44833
415372
154434

Market Cap (Rs. in Cr)

% FII Holding

18260
1531
3837
3959
2666
1688
3044
3155
2245
1176
10794
890
4313
2626
9754

9.87
4.25
13.47
0.00
7.15
3.94
12.35
4.91
0.00
0.00
12.75
2.66
13.74
2.01
4.52

Peer comparison on

Valuation and Investment

Marksan has good market liquidity thus entry and exit in the stock is easy.

Page 15

Source: Company, www.dynamiclevels.com

Valuation and Investment

INSTRUMENT
AJANTA PHARMA
BLISS GVS
DISHMAN
FDC
GRANULES
HIKAL
INDOCO REMEDIES
JB CHEMICALS
MARKSANS PHARMA
MOREPEN LAB
NATCO PHARMA
NEULAND LAB
SHILPA MEDICARE
SUVEN
SYNGENE

Price

% Pledged

2074.9
148.45
237.75
222.60
122.80
205.35
330.3
371.95
54.85
26.15
619.75
1002.4
559.40
206.30
487.70

Debt Equity Ratio (X)

5.04
0.00
0.57
0.00
26.99
0.00
0.01
0.00
0.00
0.39
0.00
4.36
0.00
0.00
0.00

0.06
0.24
0.58
0.00
0.63
1.02
0.22
0.18
0.23
0.90
0.08
0.91
0.29
0.11
0.85

Int. Coverage Ratio (X)

122.16
9.87
4.63
176.21
7.12
2.94
13.87
27.12
14.29
5.98
12.25
3.36
32.95
21.10
43.32

Marksan Pharma has low debt to equity ratio, therefore company has good leverage
position.

Peer comparison on Profitability

INSTRUMENT
AJANTA PHARMA
BLISS GVS
DISHMAN
FDC
GRANULES
HIKAL
INDOCO REMEDIES
JB CHEMICALS
MARKSANS PHARMA
MOREPEN LAB
NATCO PHARMA
NEULAND LAB
SHILPA MEDICARE
SUVEN
SYNGENE

Price

P/E Ratio (X)

PAT JUN' 16

PAT MAR' 16

PAT DEC' 15

PAT JUN' 15

2074.90
148.45
237.75
222.60
122.80
205.35
330.30
371.95
54.85
26.15
619.75
1002.40
559.40
206.30
487.70

42
24
21
24
20
34
37
16
42
68
62
31
41
24
41

119.55
27.44
45.51
48.97
31.87
10.96
19.79
49.86
1.87
4.01
47.43
9.71
24.14
32.58
59.80

106.31
13.31
49.81
38.25
33.19
22.24
20.01
43.23
-3.95
2.77
60.45
6.63
38.03
32.29
66.50

111.30
21.37
46.93
28.77
27.15
12.41
20.42
49.89
18.66
7.28
36.67
6.28
24.88
17.72
58.80

83.84
19.97
37.76
43.72
27.15
1.83
20.27
34.28
32.34
2.50
27.54
7.30
15.76
20.23
43.60

Shareholding Pattern
Because of low profitabity Marksans is trading at High PE but it will get better with increasing
profitability in future
Page 16

Source: Company, www.dynamiclevels.com

Category & Name of the Shareholders

No. of shareholder

Total no. shares held

%Holding

Promoter & Promoter Group

38
64218485
Indian
38
64218485
Public
35206
36831591
Institutions
104
13799115
Non Institution
35102
23032476
Grand Total
35244
101050076
Total 104 institutions hold position in Marksans with total holding of 13.65%

63.55
63.55
36.44
13.65
22.79
99.99

Category & Name of the Shareholders

No. of shareholder

Total no. shares held

% Holding

Institutions
Mutual Funds
Financial Institutions/ Banks
Any Other (specify)
MONDRIAN EMERGING MARKETS SMALL CAP EQUITY FUNDL.P.

60
2
4
54

56376999
103003
532741
55741255

13.78
0.03
0.13
13.62

9324413

2.28

54

55741255

13.62

5226566

1.28

7951373

1.94

FOREIGN INSTITUTIONAL INVESTORS

CALIFORNIA PUBLIC EMPLOYEES' RETIREMENT SYSTEM
MANAGED BY WASATCH ADVISORS INC.

WASATCH EMERGING MARKETS SMALL CAP FUND

COMPANY PROFILE OF MARKSANS PHARMA, NSE, INDIA

Date of Incorporation
16-Apr-1992
Date of Listing
21-Jan-2002
Management
Name
Designation
Mark Saldanha
Chairman & Managing Director
Vinay Gopal Nayak
Executive Director
Ajay S Joshi
Independent Director
Naresh B Wadhwa
Independent Director
Seetharama S Buddharaju
Independent Director
Sandra Saldanha
Whole Time Director
Registered Office Address
11th Floor, Grandeur,Veera Desai Extension Road,Oshiwara, Andheri (West),,400053,Mumbai,Maharashtra,India
Website
http://www.marksanspharma.com

Page 17

Investment Rationale

Source: Company, www.dynamiclevels.com

Investment Rationale

Marksans Pharma Ltd. received an approval from the U.S. health regulator for an Abbreviated New Drug
Application (ANDA) for Loratadine Liquid Filled Capsules 10 mg on 25th Sep 2016.

Marksans R&D capabilities include dossier development, chemical synthesis, process optimization,
formulation development, analytical development and conducting stability studies.

Marksans have a team of over 50 experienced scientists specializing in formulation development and
analytical development.

The company has achieved global recognition within a very short span of time and has major global
expansion plans for the near future.

Companies key focus areas lie in the OTC & prescription drugs that have wide-ranging applications
across fields like Oncology, Gastroenterology, Antidiabetic, Antibiotics, Cardiovascular, Pain
Management, Gynaecology, among others.

Marksans Pharmas premier manufacturing and R&D facility is located at Goa, India. The formulation
plant is spread across an 18,000 square feet campus. The plant is a 100% EOU has been designed to
accommodate rapid future expansion.

Companys total expenditure has gone down drastically from Rs. 214.28 crs to Rs. 183.31 crs almost
14.45%.
Company has lower down its interest outgo.

From loss company has posted positive result. From Rs. -5.76 crs to Rs. 1.02 this can be turnaround for
the company.

Total 104 institutions hold position in Marksans with total holding of 13.65%

Marksans Pharma has fallen from Rs. 113.90 in Dec 2015 and came down to Rs. 33.50 in March 2016
after company failed to clear an inspection by the UK drug regulator. The company got a notice of
deficiency from UK MHRA. The inspection is about to over and result is expected to come positive.

We recommend BUY in Marksans Pharma @ 49 with the target of 70 in Long term

Page 18

Source: Company, www.dynamiclevels.com

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Page 19

Source: Company, www.dynamiclevels.com