SMS Pharma - Longterm Multibagger

COMPANY PROFILE

SMS Pharmaceuticals Limited (SMSPL) manufactures and sells active pharmaceutical ingredients (APIs) and intermediates in India. The company offers APIs in the anti ulcer, anti fungal, anti migraine, anti hypertensive, and other areas. It provides intermediates in the anti ulcer, anti migraine, anti hypertensive, erectile dysfunction, anti cancer, anti viral, and pulmonary arterial hypertension therapeutic areas. The company is also involved in the provision of contract and collaborative research and manufacturing services. In addition, it offers products in the gastroenterological area. SMS Pharmaceuticals Limited was incorporated in 1987 and is based in Hyderabad, India.

PRODUCTS

1.API (Active Pharmaceutical Ingredient)

a) Anti Ulcer: Ranitidine Hcl, Famotidine, Pantoprazole Sodium Sesquihydrate

b) Anti Fungal : Itraconazole, Lanoconazole

c)Anti Migraine: Sumatriptan Succinate, Sumatriptan Base, Almotriptan Malate, Zolmitriptan, Rizatriptan Benzoate, Eletriptan Hydrobromide Monohydrate

d)Anti Hypertensive: Imidapril Hcl, Telmisartan Hcl 

e) Others: Sildenafil Citrate, Tadalafil, Ondansetron Hcl, Levetiracetam, Gabapentin, Aripiprazole, Rosiglitazone Maleate, Tenofbvir Disoproxil Fumarate

2.INTERMEDIATES

a) Anti Ulcer: Ranitidine– Intermediates, Famotidine– Intermediates

b) Anti Migraine: Rizatriptan –Intermediates·, Eletriptan HBr –Intermediates

c) Anti Hypertensive: Imidapril –Intermediate, Perindopril –Intermediates

d)Erectile Dysfunction: Sildenafil citrate – Intermediates, Tadalafil – Intermediates

e)Anti Cancer: Imatinib – Intermediates

f)Anti Viral: Lopinavir – Intermediates

3.PRODUCTS IN PIPELINE

COMPANY R&D

Strong R&D has been at the core of the SMS growth since its inception. SMS has started R&D activities with a small in-house setup in the year 2001. Later, expanded its activities  by creating a state of art corporate research center in Hyderabad, with infrastructure and expertise to carry out all the activities from product conception to the development, scale up, stability studies culminating in technology transfer to manufacturing facilities. 

SMS research team now possess expertise in process research, analytical research and scale up. A dedicated project management team handles costing, administration, purchase, and project monitoring. R&D capabilities of the company span across reaction technologies, organic compound categories, and novel catalytic systems. This center capability is proven by delivering top notch contract research modules to international clientèle.

QUALITY

The company aims at achieving Quality excellence and customer satisfaction through Good Manufacturing practices and strives for continual improvement. All its manufacturing facilities are ISO:9001 certified and are WHO GMP compliant.SMS has developed fully equipped quality control cells at all the manufacturing facilities manned by experienced and qualified staff. Each of these QA/QC blocks are equipped with Wet Labs, Instrumentation Labs, and Microbiology Labs to carry intermediate, in-process, and final product analysis.

CLIENTÈLE

In the domestic segment, the company’s major customers include reputed pharma majors such as Ranbaxy, Cadila, Dabur, Nueland, Torrent,Natco  etc. In the export segment, the client list boasts of global pharma majors such as Albion Labs, Teva Pharmaceuticals, Helm De Mexico etc.

PAST FINANCIAL PERFORMANCE

QUARTERLY

ANNUAL

FUNDAMENTAL ANALYSIS

1. As outsourcing becomes an integral part of the Indian pharmaceutical industry, the companies like SMS Pharma with specific area of focus (bulk drugs, patented drugs etc) are expected to be better placed to yield benefits in future .

2. SMSPL is one of the leading producers of APIs and other pharmaceutical intermediates. It has been engaged in the manufacture of APIs, which are going off-patent, and has developed non-infringing processes for manufacture of APIs. SMSP is among the world’s top producers of bulk Ranitidine (anti-ulcerant) and revenues from this product accounted for almost half of the company’s revenues. Apart from Ranitidine, the company’s portfolio includes range of products for various therapeutic segments.

3. The strategy of the Company is to continuously globalize the intellectual property assets and enhance value to the shareholders and customers. The company is developing a broad portfolio of DMFs/ ANDAs through non-infringing processes and intellectual properties for developing its products in regulated markets. SMSPL has strong presence across the pharmaceutical chain, manufacturing and marketing active pharmaceutical ingredients (APIs/Bulk Drugs). The market segment for the products of SMSPL demonstrate growth tends every year with raising volume and value. SMSPL has robust product portfolio spread over major product areas encompassing Gastroenterological, Anti-Retroviral, Anti-Migraine, Anti-Fungal, Anti-Hypertensive and other products. Two manufacturing facilities, (in Hyderabad and Vijayanagarm Districts) are qualified by USFDA. Hyderabad facility also has a successful EUGMP (Germany) inspection. SMSPL is the largest manufacturer of Anti-Ulcer products in the World. Having forged tie ups with MNCs in Anti-Retroviral, Anti Migraine segments, significant revenue potential is envisaged apart from consolidation of existing product revenues where SMSPL is market leader.

4. India Ratings and Research has revised its outlook on the pharmaceuticals sector for FY 2014–15 to positive from stable on the back of increased exports. With the support of Pharmexcil and the government in the form of Brand India Pharma project iPHEX, the sector would continue to grow and meet the healthcare requirements of the developing world. The country will also see the largest number of mergers and acquisitions (M&A) in the pharmaceutical and healthcare sector, according to consulting firm Grant Thornton. With 70 percent of India’s population residing in rural areas, pharma companies have immense opportunities to tap this market. Demand for generic medicines in rural markets has seen a sharp growth.

5. SMS Pharma lays emphasis on risk management and has an enterprise wise approach to risk management, which lays emphasis on identifying and managing key operational and strategic risks. Through this approach, the company strives to identify opportunities that enhance organizational values while managing or mitigating risks that can adversely impact its future performance.

6. SMSPL has set ambitious goals for the years to come in expectation of moderate upward trend in the global economy. The Company has world class manufacturing facilities and an enviable basket of approved markets and strong relationship built with some of the best names in the pharma industry. The management has set in motion a set of strategic initiatives to improve the revenues and profitability of the company.

Hence,We consider it as an opportunity to add into the portfolio SMS PHARMACEUTICALS LTD below 600 on dips for longterm. The stock is listed in both the exchanges.

LINK TO COMPANY WEBSITE CLICK HERE

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