1. Two products company. BCG Vaccine and BCG ONCO contribute more than 72% to the total revenue of the company.
2. Operates in highly price regulated markets in India.
3. Single manufacturing facility.
4. Company has made a Net loss for the preceding four out of five financial years.
5. Very high debtor and inventory level.
VALUATION AND RECOMMENDATIONS:
The company has limited history of profitability. Debtors and inventory levels are high, indicating that products are not fast moving and the company has been extending abnormal credit period for the buyers.
At Rs 76-80, the offer is made at 20 plus PE on FY 16 earnings which is expensive. After the IPO / OFS, the promoters’ holdings will come down by 38%.
The offer is a mix of positives and negatives and thus, it qualifies as a high risk investment. If everything goes right, it can emerge as a multibagger in a few years. However, as of now, GreenSignal Bio Pharma IPO is something for investors who have high risk appetite.
The company posted an inconsistent top line, with losses for FY 2012 to FY 2015 largely due to ongoing investments and inability to win key tenders as also reduced orders from Cadila Healthcare.
For the June 2016 quarter, the company reported net sales of Rs 10.15 crore with the OPM of 40.3% resulted in an OP of Rs 4.09 crore. Interest costs stood at Rs 0.66 crore and depreciation at Rs 1.19 crore. After providing total tax of Rs 0.79 crore, PAT for the June 2016 quarter stood at Rs 2.94 crore. EPS for the June 2016 quarter is not annualized due to the seasonality of business.
For FY 2016, the net sales were up by 211% to Rs 20.39 crore. The OPM stood at 42.6% as compared to 27.6% for FY 2015, thus leading to a 380% increase in OP to Rs 8.69 crore. Interest costs stood at Rs 0.66 crore down by 9% and depreciation was up by 3% to Rs 1.19 crore. After providing total tax of Rs 1.63 crore, PAT for FY 2016 stood at Rs 5.31 crore. On equity share capital of Rs 38.37 crore of face value of Rs 10 each, EPS for FY 2016 works out to Rs 1.4. At a higher price band of Rs 80 per equity share, the scrip is offered at P/E multiple of 57.8.
109.1. Khemka| Link| Bookmark|
November 9, 2016 9:28:24 AM
(1000+ Posts, 400+ Likes)
GOOD PHARMA COMPANY manufacturing Vaccines Just like Caplin Point Laboratories The issue was oversubscribed 129 Times Today Price is Rs 365/- after Stock Split !! If Ipo like Green Signal with same product then PEERS are showing 3000 % Appreciation !!! However allotment chances are 1:49 or 1:50 in Retail Category.