Saturday, 8 February 2014

MARKSANS PHARMA MULTIBAGGER POTENTIAL STOCK D09M02Y2014

Marksans pharma is a promising company with presence across multiple countries in various geographies. Manufacturing facilities are at Goa, India and Southport, UK. Focus areas include Oncology, Gastroenterology, Antidiabetic, Antibiotics, Cardiovascular, Pain Management, Gynaecology. For more info check, http://www.marksanspharma.com

The company has 3 overseas subsidiaries; Bell, Sons & Co (in UK), Nova pharma Australasia (in Australia) and Relonchem Lts (in UK).

PRESENT DAY NUMBERS
CMP on Day9 Feb2014: Rs 17.50                    Market cap: 674 crores                       FV: 1
Cons revenue FY13: 438 cr (FY12 355 cr)         Net profit: 45 cr [FY12 (17) cr]             EPS: 1.19
Cons revenue 9MFY14: 471 cr                         NP 9MFY14: 62 cr                 9MFY14 EPS: 1.59
Debt: 85 cr

BRIEF HISTORY
Originally incorporated in 2001 as a wholly owned subsidiary of Glenmark Pharmaceuticals. Later spun off into a separate entity, Glenmark Laboratories Ltd. Name changed to “Marksans Pharma Ltd” in 2005. The company has world class manufacturing facilities for API and Formulations, approved by US FDA, UK MHRA, Australia TGA and Brazilian ANVISA health authorities.

Subsequently the company underwent a series of mishaps and challenges, like bad takeover/mergers, default of FCCB/loans, declining revenues, business downslide, etc; resulting in completely eroding the net worth. The company had to register to BIFR under sick companies Act. The stock market had written off the company and the share prices languished for years.

MULTIBAGGER POTENTIAL

Turnaround details and Inflection points:
1. The company allotted 17,500,000 equity shares to the chief promoter, Mr. Mark Saldanha, thereby increasing the equity share capital in December 2012
2. Marksans entered into a settlement agreement with the holders of FCCB for settling USD 26 million worth in principal value in March 2013
3. De-registered from the purview of SICA and no longer in BIFR as per hearing held in July 2013
4. Turned profitable with consolidated net profits of 45 cr in FY2013

Company on a growth track:
1. Consistent business and financial performance since last 6 quarters
2. Cons revenue Q3FY14 is 168 cr vs 114 cr in Q3FY13 (growth of around 47%) 
3. Cons NP Q3FY14 is 22 cr vs 8 cr in Q3FY13 (improvement of around 175%)
4. The company has one of the biggest manufacturing facility in India having USFDA approval for softgel products.  Products based on soft gelatine are high in demand

INTERESTING INFO
1. Mr. Mark Saldanha, promoter and MD of Marksans, is the brother of Mr Glenn Saldanha, the chairman & MD of Glenmark pharmaceuticals
2. Between January and April 2013, Mark purchased the company stock from open markets and increased his stake to 51.25%

MY TAKE
Marksans is a fantastic turnaround story. Promoter with excellent credentials, competent top management, good mix of products and representation in various geographies. Company also focused on drugs going off patent between 2013 and 2018. Has capability to leverage such opportunities. Deeply undervalued and beaten down stock. A strong potential multibagger. 

Disclosure: Marksans pharma is a part of my core holdings

                                    
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20 comments:

  1. Unknown10 February 2014 at 22:48

    Nice analysis Yogi..
    Can u please share all your views on the stocks you are trading

    ReplyDelete
  2. ZorbaYogi10 February 2014 at 23:20

    My friend, Normally I do not trade. My focus is on multibagging investments, where the minimum profit could be 200%. Maximum, sky is the limit.

    Currently my investment basket comprises of Trigyn (there is a blog post on that), Marksans, Onmobile global, GVK, Blue Star info and Indiabulls power. All these have significant potential to give fantastic returns over next 1 - 2 years.

    I plan to add more companies to the blog over the next few weeks. And will continue to provide updates on these multibaggers.

    Please feel free to ask questions, clarifications and voice your opinions, views and ideas. All the best, cheers!!

    ReplyDelete
  3. kamal11 February 2014 at 08:51

    Hello Yogi
    Thanks for starting this nice blog. I was already holding Marksans and after reading your blog I started tracking Trigyn. There is one more smallcap IT stock mindteck that can give multiply returns. Please study and share ur views about it.

    ReplyDelete
    Replies
    1. ZorbaYogi23 February 2014 at 07:18

      Hi Kamal,

      I conducted a high level analysis on Mindteck. On its own merit, it looks like a decent company. The stock is undervalued and could provide good returns. Over all it looks okay.

      How ever, I cannot be sure if it has the potential to become a multibagger. The reason is, lack of concrete visibility and specific details about their plans, strategies, revenue streams, etc.

      Hope this helps. Regards!!

      Delete
    2. kamal4 March 2014 at 09:12

      Hello Sir,

      Thanks for looking into Mindteck.

      I already own it but trimming position in it and adding Firstsource, Trigyn, Intense Tech, Saksoft and Arrow coated.
      By the way whats ur target for Trigyn in next 2-3 years.

      Regards
      Kamal

      Delete
    3. ZorbaYogi5 March 2014 at 03:50

      Hi Kamal,

      Good to hear from you.

      I will respond to Trigyn question in that specific thread as it will help in consolidating the messages.

      Please refer in the comments section of the Trigyn thread.

      Cheers!!

      Delete
  4. ZorbaYogi11 February 2014 at 20:51

    Sure, Kamal

    I will take a look at Mindteck and share my views. Remember seeing that company nearly 10 years ago around Jayanagar in Bangalore (near the old office of Mindtree)

    Trigyn is a strong potential multibagger. Take a look at the projects they have won in the last 1 year. Very promising. You can find it in the "news" section of their website.

    Also, keep an eye on Onmobile global. The worst seems to be over for the company. Has fabulous potential.

    Please keep sharing your view, thoughts and opinions. Cheers!!

    ReplyDelete
  5. pradeep23 February 2014 at 04:27

    sir, i already hold Marksans Pharma, but current situation i fear but read your article after i think plan to continue hold.

    ReplyDelete
    Replies
    1. ZorbaYogi23 February 2014 at 06:04

      Ram singh saab,

      You must invest in a company, only when you are fully convinced.

      And when you invest, it must be for long term. (minimum 2 - 3 years)

      And in the short term, if the price goes down, you should not worry. Just relax and give it time.

      All the best!!

      Delete
    2. ZorbaYogi23 February 2014 at 19:17

      Hi Ram Singh,

      One question,

      The company has been doing really well since last 4 quarters. The results were very good in the recent quarter, Q3 FY2014.

      Just wanted to know, why you fear the current situation?

      Thanks!!

      Delete
    3. pradeep1 March 2014 at 09:10

      Thanks Yogi! sir! for elaborate reply, why i fear that recent result good and i trap higher price but after that price suddenly fall and also price down day to day, thats why i fear about this script.

      Delete
  6. ZorbaYogi3 March 2014 at 06:05

    Mr Ram Singh,

    Investment is always long term. Before you invest, you must be convinced, this is the right company for me. After that you need to give it time.

    If you want to profit from stock market, patience is a must. 100%

    One strategy is, not to look at the share price every day. That will be very helpful so that you don't get worried about short term movements (down or up)

    Hope this helps!! All the best!!

    ReplyDelete
  7. pradeep25 March 2014 at 10:41

    Sir! thankyou very much for suggestion me "patience" yes now marksans pharma price is Rs.25.70 level, before i feel to trap at higher level but now i got and cross over my price level.

    ReplyDelete
  8. ZorbaYogi26 March 2014 at 07:13

    Welcome, Ram Singh

    All the best.

    ReplyDelete
  9. ZorbaYogi31 May 2014 at 22:27

    Marksans Pharma update D01M06Y2014

    Consolidated revenue for FY2014 is 629 cr. (increase by 43%)
    Consolidated net profit for FY14 is 71 cr (post tax profits increase by 56%)

    Dividend of 10% (10 paisa per share) recommended
    Since turnaround started, dividend for the first time. Step in the right direction.

    All geographies doing well and making good progress.

    During May 2014, market cap touched 1000 crore since turnaround.
    Long term prospects for the company looking good. Best regards!!

    ReplyDelete
  10. Anonymous22 July 2014 at 01:02

    Heloo Mr.Yogi,

    I have been following your blog and you are right in all of your predictions. Kudos to your dedication and Homework. I have Marksans Pharma in my radar, i am waiting for the dips. However i need your views on Jagsonpal Pharmaceuticals.


    Thank you

    ReplyDelete
    Replies
    1. ZorbaYogi26 July 2014 at 21:52

      Hi Avinsh; Good to see ur msg. Thanx for ur appreciation!!

      Took a high level view of Jagsonpal. It is yet another small pharma company. Active since a few days with some UC's. Beyond that I cannot comment.

      My focus is on potential multibagger stocks which have potential to give profits in the range of 200 - 800%

      That needs a detailed study, analysis and assessment of the company.

      Other than Marksans; the only pharma company in which I am invested is: Morepen labs.

      Best regards!!

      Delete
  11. markalphonso14 August 2014 at 03:50

    hi zorba,

    MP has given a good quarter, and hope there are many more to come.

    sir would request you to please advice till what levels we should be holding this stock or till what levels do you think can this scrip go upto in the years to come.

    (just needed an idea of the scrips potential)

    thanks & regards

    ReplyDelete
    Replies
    1. ZorbaYogi15 August 2014 at 07:14

      Hi Mark, You have asked a very important and relevant question. How ever, there are no easy answers here.

      When exactly should I exit a multibagger stock? That is one of the most difficult question to answer.

      Here are my thoughts on this:

      1. Each one of us should set a happiness benchmark. Meaning, I will be happy when this stock gives me a profit of 100, 200, 400 or 800%

      2. Secondly, we got to track the progress the company is making, its progress as per financials and future potential as a business.

      We need to balance between these both; and make a decision as to when to exit the investment.

      When to sell (and when to buy) are always individual decisions, that we need to learn to make as investors.

      Hope this will help you in making decisions. All the best!!

      Delete
    2. ZorbaYogi15 August 2014 at 07:25

      Mark, Now let us take the specific example of Marksans pharma.

      The company has undergone a massive turn-around in the last 2 yrs. After the TA; the quarters results have been good consistently. During the same period the stock price has moved from 2 rs to 44. This has been a 20-bagger. Now what next?

      On the positive side; there is no reason to believe why the company should not continue with its good performance over next 2 - 4 quarters.

      On the negative side; several things could go wrong with a company. For ex; A problem with regulators, issue to get approvals, etc

      Over the next 6 - 12 months there could also be a global stock market crash. These things do happen without much warning.

      In any one of the case; the stock could be available at much lower levels.

      Keeping all these factors in mind, you need to make the decision that is best for you.

      Kind regards!!

      Delete

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