Jb Chemicals
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- Words: 916
- Pages: 11
Date of report
Monday, May 19, 2008
Company
JB Chemicals & Pharmaceuticals Ltd - Quick & Dirty Analysis
Analyst
Dhananjayan J
Contact
[email protected]
& Dirty Analysis
Table of Contents (Please enable the macro attached to this file)
Fact Sheet
>>
Quick & Dirty Analysis
>>
Disclaimer
>>
Fact Sheet JB Chemicals & Pharmaceuticals Ltd J. B. Chemicals & Pharmaceuticals Ltd. (JBCPL), known to many as Unique Pharmaceutical Laboratories is one of India’s leading global pharmaceutical companies. The company manufactures and markets a wide range of pharmaceutical formulations, herbal remedies, bulk drugs, intermediates and radio-diagnostics. Website
http://jbcpl.com/index.html
Special situation
Buyback
Pro forma valuation Price ratio Price to earnings Price to free cash flow Price to tangible book value
11.8 21.7 0.8
Enterprise value ratio EV / Sales EV / EBITDA EV / EBIT EV / (EBITDA-Capex)
0.9 7.9 10.7 14.6
Debt and interest coverage Net Debt / EBITDA EBIT / Interest expense
2.8 2.8
Yield Ratio Dividend yield Earnings yield FCF1 yield
1.1% 8.5% 4.6%
Return on Assets Return on operating assets Return on capital invested
6.9% 8.1%
Operating margins EBITDA EBIT Net income Depreciation Vs. Capex
11.7% 8.7% 5.1% Capex
The above valuation ratios are computed after assuming buyback in the LTM financial numbers published by the company. (Refer QAD sheet)
Conclusion Highly capital intensive business. Capex is more than depreciation. As a result the return on invested capital as well as oper pharma business is highly regulated one. There may be some unknown risks associated with this business. This is difficult to qu highly leveraged. Debtors o/s was more than accounts payable. This indicates the poor working capital management. Buyba the overall valuation. Hence this stock is not good for investment.
Our Verdict:
Not interesting - avoid.
101 91 81 71 61 51 41 31 1 1 1 1 12 2 3 3 4 5 56 6 7 7 8 89 9 1 1 1 11 1 1 1 2 2 34 4 5 1 2 2 / / / / / / / / / / / / / / / / / 0 0 1 12 2 / / / / / / / / / / / 8 29 2 1 3 1 4 25 2 5 2 6 26 2 / / / / / / 1 2 1 2 12 2 7
ed capital as well as operating assets are low. Moreover iness. This is difficult to quantify. Above this company is pital management. Buyback as catalyst is not enhancing
JB Chemicals & Pharmaceuticals Ltd (Rs in lakhs) Pro forma 3/07 56,240.44 7.0% 839.09 14,499.16 5,124.38 9,346.77 6,508.54 13,744.42 400.13 6,578.21 11.7% 1,690.02 4,888.19 8.7% 1,757.72 9.3% 63.44 11.3% 3,193.91 5.7% 319.39 2,874.52 5.1% 775.71 INR 3.71
QUICK & DIRTY ANALYSIS Net sales Total growth Change in inventories Consumption of raw materials Purchase of traded goods Employee costs Sales promotion & publicity Other expenditure Other income - last yr export incentives EBITDA Margin Depreciation EBIT Margin Interest expenses Interest exp rate Interest income - last yr assumed same this yr Interest income rate EBT Margin Tax @ 10% after assuming all SEZ benefits Net income Margin Outstanding shares EPS
FY 3/07 Buyback 56,240.44 7.0% 839.09 14,499.16 5,124.38 9,346.77 6,508.54 13,744.42 400.13 6,578.21 11.7% 1,690.02 4,888.19 8.7% 1,620.54 9.3% 229.87 11.3% 3,497.52 6.2% 349.75 3,147.77 5.6% 843.26 67.55 INR 3.73
Total assets - FY 3/07 Investments - non cash Cash Goodwill Loans and advances - cash non recoverable Prelimnary expenses Operating Assets (OA) Return on Operating Assets Cash return on Operating Assets Cash return on Operating Assets after capex
71,229.27 748.62 2,038.57 1,690.23 2,715.05 0.62 64,036.18 6.9% 9.2% 5.0%
71,229.27 748.62 2,038.57 1,690.23 2,715.05 0.62 64,036.18 6.9% 9.2% 5.0%
Fixed assets excluding Goodwill Current assets excluding cash Current liabilities excluding debt Invested capital (IC) Return on Invested Capital Cash return on Invested Capital Cash return on Invested Capital after capex
25,021.71 39,688.39 10,097.39 54,612.71 8.1% 10.8% 5.9%
25,021.71 39,688.39 10,097.39 54,612.71 8.1% 10.8% 5.9%
Investment in working capital in FY 3/07 WC as a % on sale in FY 3/08
29,591.00 52.6%
29,591.00 52.6%
Shareholder's Equity - book value - FY 3/07 Tangible Book Value (TBV) Return on Equity (ROE)
41,846.20 40,155.97 11.0%
41,846.20 40,155.97 11.0%
Cash return on Equity (ROCE) Cash return on Equity after capex
14.7% 8.0%
14.7% 8.0%
Capital expenditure - assumption Notional FCF1 before WC investment Notional FCF1 / share TBV / share Cash Debt
3,000.00 1,837.79 INR 2.18 INR 50.85 2,038.57 17,436.73
3,000.00 1,564.54 INR 2.02 INR 54.97 562.57 18,912.73
Price Mcap EV
INR 43.70 36,850.61 52,248.77
INR 43.70 33,898.61 52,248.77
EV/Sales EV/EBITDA EV/EBIT EV/(EBITDA-Capex)
0.9 7.9 10.7 14.6
0.9 7.9 10.7 14.6
PE P/FCF1 P/TBV
11.7 20.1 0.9
11.8 21.7 0.8
2.3 3.0
2.8 2.8
INR 0.50 1.1% 8.5% 5.0%
INR 0.50 1.1% 8.5% 4.6%
Net debt / EBITDA EBIT / Interest expense Dividend per share Dividend yield Earnings yield Notional FCF1 yield
1,476.00 1,476.00
Disclaimer
Reports prepared by the Value Hunt Research & Analytics contain selected information and do not purport to be comp available information and data ("the Information") believed to be accurate and complete. Value Hunt Research & Analytics to be accurate and complete, nor guarantee its accuracy and completeness. Possible errors or incompleteness of the Inform liability, neither with regard to indirect nor to direct or consequential damages. All rights reserved.
o not purport to be complete. The reports based on publicly unt Research & Analytics neither do examine the Information ompleteness of the Information do not constitute grounds for .
Monday, May 19, 2008
Company
JB Chemicals & Pharmaceuticals Ltd - Quick & Dirty Analysis
Analyst
Dhananjayan J
Contact
[email protected]
& Dirty Analysis
Table of Contents (Please enable the macro attached to this file)
Fact Sheet
>>
Quick & Dirty Analysis
>>
Disclaimer
>>
Fact Sheet JB Chemicals & Pharmaceuticals Ltd J. B. Chemicals & Pharmaceuticals Ltd. (JBCPL), known to many as Unique Pharmaceutical Laboratories is one of India’s leading global pharmaceutical companies. The company manufactures and markets a wide range of pharmaceutical formulations, herbal remedies, bulk drugs, intermediates and radio-diagnostics. Website
http://jbcpl.com/index.html
Special situation
Buyback
Pro forma valuation Price ratio Price to earnings Price to free cash flow Price to tangible book value
11.8 21.7 0.8
Enterprise value ratio EV / Sales EV / EBITDA EV / EBIT EV / (EBITDA-Capex)
0.9 7.9 10.7 14.6
Debt and interest coverage Net Debt / EBITDA EBIT / Interest expense
2.8 2.8
Yield Ratio Dividend yield Earnings yield FCF1 yield
1.1% 8.5% 4.6%
Return on Assets Return on operating assets Return on capital invested
6.9% 8.1%
Operating margins EBITDA EBIT Net income Depreciation Vs. Capex
11.7% 8.7% 5.1% Capex
The above valuation ratios are computed after assuming buyback in the LTM financial numbers published by the company. (Refer QAD sheet)
Conclusion Highly capital intensive business. Capex is more than depreciation. As a result the return on invested capital as well as oper pharma business is highly regulated one. There may be some unknown risks associated with this business. This is difficult to qu highly leveraged. Debtors o/s was more than accounts payable. This indicates the poor working capital management. Buyba the overall valuation. Hence this stock is not good for investment.
Our Verdict:
Not interesting - avoid.
101 91 81 71 61 51 41 31 1 1 1 1 12 2 3 3 4 5 56 6 7 7 8 89 9 1 1 1 11 1 1 1 2 2 34 4 5 1 2 2 / / / / / / / / / / / / / / / / / 0 0 1 12 2 / / / / / / / / / / / 8 29 2 1 3 1 4 25 2 5 2 6 26 2 / / / / / / 1 2 1 2 12 2 7
ed capital as well as operating assets are low. Moreover iness. This is difficult to quantify. Above this company is pital management. Buyback as catalyst is not enhancing
JB Chemicals & Pharmaceuticals Ltd (Rs in lakhs) Pro forma 3/07 56,240.44 7.0% 839.09 14,499.16 5,124.38 9,346.77 6,508.54 13,744.42 400.13 6,578.21 11.7% 1,690.02 4,888.19 8.7% 1,757.72 9.3% 63.44 11.3% 3,193.91 5.7% 319.39 2,874.52 5.1% 775.71 INR 3.71
QUICK & DIRTY ANALYSIS Net sales Total growth Change in inventories Consumption of raw materials Purchase of traded goods Employee costs Sales promotion & publicity Other expenditure Other income - last yr export incentives EBITDA Margin Depreciation EBIT Margin Interest expenses Interest exp rate Interest income - last yr assumed same this yr Interest income rate EBT Margin Tax @ 10% after assuming all SEZ benefits Net income Margin Outstanding shares EPS
FY 3/07 Buyback 56,240.44 7.0% 839.09 14,499.16 5,124.38 9,346.77 6,508.54 13,744.42 400.13 6,578.21 11.7% 1,690.02 4,888.19 8.7% 1,620.54 9.3% 229.87 11.3% 3,497.52 6.2% 349.75 3,147.77 5.6% 843.26 67.55 INR 3.73
Total assets - FY 3/07 Investments - non cash Cash Goodwill Loans and advances - cash non recoverable Prelimnary expenses Operating Assets (OA) Return on Operating Assets Cash return on Operating Assets Cash return on Operating Assets after capex
71,229.27 748.62 2,038.57 1,690.23 2,715.05 0.62 64,036.18 6.9% 9.2% 5.0%
71,229.27 748.62 2,038.57 1,690.23 2,715.05 0.62 64,036.18 6.9% 9.2% 5.0%
Fixed assets excluding Goodwill Current assets excluding cash Current liabilities excluding debt Invested capital (IC) Return on Invested Capital Cash return on Invested Capital Cash return on Invested Capital after capex
25,021.71 39,688.39 10,097.39 54,612.71 8.1% 10.8% 5.9%
25,021.71 39,688.39 10,097.39 54,612.71 8.1% 10.8% 5.9%
Investment in working capital in FY 3/07 WC as a % on sale in FY 3/08
29,591.00 52.6%
29,591.00 52.6%
Shareholder's Equity - book value - FY 3/07 Tangible Book Value (TBV) Return on Equity (ROE)
41,846.20 40,155.97 11.0%
41,846.20 40,155.97 11.0%
Cash return on Equity (ROCE) Cash return on Equity after capex
14.7% 8.0%
14.7% 8.0%
Capital expenditure - assumption Notional FCF1 before WC investment Notional FCF1 / share TBV / share Cash Debt
3,000.00 1,837.79 INR 2.18 INR 50.85 2,038.57 17,436.73
3,000.00 1,564.54 INR 2.02 INR 54.97 562.57 18,912.73
Price Mcap EV
INR 43.70 36,850.61 52,248.77
INR 43.70 33,898.61 52,248.77
EV/Sales EV/EBITDA EV/EBIT EV/(EBITDA-Capex)
0.9 7.9 10.7 14.6
0.9 7.9 10.7 14.6
PE P/FCF1 P/TBV
11.7 20.1 0.9
11.8 21.7 0.8
2.3 3.0
2.8 2.8
INR 0.50 1.1% 8.5% 5.0%
INR 0.50 1.1% 8.5% 4.6%
Net debt / EBITDA EBIT / Interest expense Dividend per share Dividend yield Earnings yield Notional FCF1 yield
1,476.00 1,476.00
Disclaimer
Reports prepared by the Value Hunt Research & Analytics contain selected information and do not purport to be comp available information and data ("the Information") believed to be accurate and complete. Value Hunt Research & Analytics to be accurate and complete, nor guarantee its accuracy and completeness. Possible errors or incompleteness of the Inform liability, neither with regard to indirect nor to direct or consequential damages. All rights reserved.
o not purport to be complete. The reports based on publicly unt Research & Analytics neither do examine the Information ompleteness of the Information do not constitute grounds for .
