DR DATSONS LABS MULTIBAGGER POTENTIAL STOCK D18M04Y2015

IGNORE THIS POTENTIAL MULTIBAGGER

THIS POST WAS A CLEAR MISTAKE. MY WORST STOCK PICK TILL DATE

(Though some people suggested me to remove this post, I have retained this to acknowledge my mistake and hence, try not to repeat this in the future)       



Dr. Datsons Labs is a research driven pharma company. Corporate office is situated in Raigad district in Maharashtra. They have an API manufacturing facility and R&D centre in Mahad and a Forumulations manufacturing facility in Pune. The company has a vision to be a premier provider of new medical therapies in Anti Cancer and Anti Malaria. For more info check, http://www.drdatsons.com/   

This company was formerly known as Aanjaneya Lifecare. The original promoter, Dr Kannan Vishwanath, received the young entrepreneur award by Singapore India chamber of commerce. The company also won the Business Excellence Award at World Summit of Emerging India in July 2009. In May 2011, Aanjaneya Lifecare came with an IPO of 50,00,000 equity shares of Rs 10 at a price band of Rs.228 to Rs.240; the company got listed in the range of approx 300 rs and hit a life time high of 850 rs in January 2013. 

NUMBERS - THE LATEST       
Market cap: 150 crores              CMP on Day18 Apr2015: Rs 14         BV: 45 rs.(approx)   
Revenue FY14: 421 cr                Net profit FY14: 67 lakhs                    FV: 10   

POSITIVES - MULTIBAGGER POTENTIAL  
1. Dr. Datsons Labs is the 3rd largest quinine salts manufacturer in the world and has among the largest controlled substances quota in India.
2. The company created an infringing route of synthesis for 3 complex anti-cancer drugs namely Docetaxel, Gemcitabine Hydrochloride and Capacitabine. This resulted in global patents, and hence the prospects of long term global revenues.
3. The company transformed lozenges into a Novel Drug Delivery System(NDDS) for common illnesses, paving way for a multitude of medicines/drugs.
4. As per AR of FY2014, the long term debt on the balance sheet got reduced from 358 CR to 167 crores (as a result of FCCB conversion)
5. Datsons forged a potential collaboration with Delhi based Ochoa laboratories to supply oncology drugs worth 120 crore to cater to the European market.  

NEGATIVES - POSSIBLE RISKS
1. Quite clearly the last 2 years have been very bad for the company. Probably the tough times could last a little longer. 
2. A majority of FCCB bond conversion has already taken place with substantial dilution in equity. There are still some pending conversions which could happen at a future date.

INTERESTING INFO   
1. Under the current SHP status, this company has no promoter. This company is entirely managed by the board of directors, with the backing of the financial investors, most of them foreign investors; very similar to Subex (the story is almost identical)
2. During March 2015, the company signed a deal with Yemen's AL-MUGDH pharma to export Anti-malarial drugs worth 80 crore.
3. USA based Westminster Pharmaceuticals has shown interest in Dr Datsons contract manufacturing.
4. Recently, there was an announcement that Dr Datsons will supply anti-malarial drugs to Clinton Foundation via the CHAI, Clinton Health Access Initiative.
5. Belgium based Eubage Laboratory was expected to sign an agreement with Dr.Datsons for manufacturing 20 nutraceuticals at its Pune formulations plant. This deal is expected to ensure a revenue flow of approx 100 crore over 18 months.  

MY TAKE    
Dr Datsons Labs, in its current form, can be termed as a 2nd life of the company. We can call it version 2.0; as this is not just a simple turn around, but a complete over haul of the company, some what very similar to Subex. The new management have almost got a clean slate with some past baggages.       

An enviable product portfolio, commendable infrastructure, staff skills and capability, track record of past patents(and new ones submitted), a strong vision and proven business plan; all these are the positive factors from the past legacy of the company; strength from the previous life very much relevant to the present. Recent orders are a testament to that.                

Zeal and focus demonstrated by the new management team, recently bagged orders are concrete proof that they are able to secure substantial business/contracts mainly from foreign companies/clients, and further interest expressed from corporates overseas, either to do business or acquire stake in the company, all auger well for the future prospects and growth of the company.    

At the lower end of the futuristic probability spectrum, the new management and board could well steer the company from its rough waters, into a path of growth and profitability. Further, from a more optimistic and ambitious view, a strong global pharma major taking over this company (or a meaningful stake); and work towards synergizing with the company's competitive advantage and take its offerings to the world, could well prove to be a blue sky for the company, in which case, SKY IS THE LIMIT.   

A potential multibagger as and when the new management team turns around the company completely!!  
A potential super multibagger if the foreign multinational takes a majority stake and leverages the strength of the company on a global scale!!      

Disclosure: I own shares in Dr.Datsons       


For personal advise and consultation(commercial); 
                                                         you can contact me via zorbayogi9@gmail.com  

Important Note: Potential multibaggers are those stocks which have potential to give 200 - 1000% profits. Obviously such returns take time. Probably 2 - 3 years or more. Short term volatility is the reality of the stock market and that will always happen. Short term movements(upside and downside) are impossible to predict. Only invest funds that you will not need for the next 3 - 4 years. As long as you buy a stock for the right reason, and are convinced about the future prospects of the company, there is no need to worry if the share price goes down and stays down for a period of time after you buy; provided you have followed the cardinal stock market mantra BUY LOW (AND SELL HIGH). 

Very important note: The objective of this blog is to share knowledge and info about multibagger ideas/opportunities. Neither is this trading website nor an analyst website nor a Buy/Sell call website. For stock market success, always do your home work, own analysis and make your own decisions.