Anand Rathi
Dishman Carbogen (Buy)
CMP: ₹85.5
Target: ₹227
b) Currently it has over 500 molecules in various stages of development of which 18 molecules are in late phase 3 trials. It anticipates at least 3-4 molecules to get commercialised in the next couple of years post which the molecules will be transferred to India. The company has maintained its steady state sales guidance of 8-10 per cent (1HFY20 sales growth at 6 per cent) and expects EBITDA margins to expand 300bps in next 3-5 years.
Valuation: Dishman remains fully committed to scaling up its business and primary growth drivers such as commercialisation of molecules in late phase 3 (18 molecules) and global dominance in Vitamin D are likely to help Dishman report revenue and PAT CAGR of 11 per cent and 15 per cent respectively over FY19-21. We maintain ‘buy’.
Risks: Currency fluctuations, regulatory hurdles, deferred orders.