stock updates- Bulk drugs and Pharma

Markets are in a corrective mode but one sector seems to be coming out of its slumber;
Thats the Pharma sector with Cipla and Dr Reddys taking the lead

Here is an attempt to examine some of them
1 JB Chemicals
2 Wockhardt


JB Chemicals

In the quarter ending Dec 05 it has clocked a turnover of 130cr. and Operating Profit of 25.4 cr clocking an OPM of 19.6%. and Profit before tax being 21.9 cr. (Margins being 16.8%). This compares with a turnover of 100 cr. and Operating Profit of 22. cr clocking an OPM of 22.%. and Profit before tax being 18.2 Cr. (Margins being 18.2%). In the Sep 05 qtr it made a PBT of 29.7 cr which included an other income component of 4cr at approximatley the same turnover levels.

Projecting for the full year ending March 2006 its turnover will be 500 cr and PBT in the range of 85 cr compared to the figures of 371 cr and 67 cr for March 2005. The NP figures are projected to be 70 cr against 60 cr for 2005. The margins are under pressure.

The co. has plans to open a subsidiary in Russia and has made a preferential allotment at Rs. 114/ per share of face value Rs 2/-

After the co. split its shares, from Sept 2005 the stock was moving in a range of 80-95 rs. and recently has given a break out. Can be accumulated.

JBCPL has biggest overseas brand “Doktor Mom” voted the most trusted European Brand in Readers Digest for the 4th successive year. JBCPL’s other strong overseas brands:

Metrogyl
Nicardia
Metrogyl Denta
Fitovit
Zecuf
Rantac

Some of the points of the chairman's speech of January 2006
* We are investing Rs.65 Cr in new facilities for manufacture of large/small volume parentrals and API¡¦s at Panoli to meet increasing demand in fast growing regulated markets such as USA, Europe, Canada, Australia, South Africa in addition to Russia and other CIS countries, Sri-Lanka, Africa, far/middle East, Latin America etc.

* We have entered into a Product Development Agreement with Taro Pharmaceutical Industries Ltd., and its subsidiaries and affiliates, USA, for development of several products for the US market. As a part of our strategy we had invested in building R & D capabilities and grow business through out-sourcing, this agreement is a great ratification of our strategy. We see many such deals coming in future for R & D outsourcing.

* We are planning to invest upto USD 3 million in setting-up a wholly owned subsidiary in Russia. We believe this will help us increase our market share in Russia and CIS countries and maintain our leadership position with introduction of new products and novel technologies in much wider therapeutic areas in near future.

2 Wockhardt

Wockhardt has not declared its results. It is moving in a channel and is trying to move past its resistance line at 480/- Good on fundamentals, and should give decent returns going by the charts also.