Balaxi Pharmaceuticals Ltd – Multibagger Stock Analysis 2023
In this article, we can see Balaxi Pharmaceuticals Ltd as a Potential Multibagger Stock as on September 2023.
Balaxi Pharmaceuticals Ltd
Balaxi Pharmaceuticals Ltd is an IPR-based pharmaceutical Company engaged in producing, stocking, selling, and supplying branded and generic medicines. Ashish Maheshwari is the current Chairman & Managing Director. Minoshi Maheshwari is the current Non-Executive Director.
Geographical Presence
The co’s 100% of its revenues come from export sales to countries like Angola (59%), Dominican Republic (28%) & Guatemala(13%). It is in the process of expanding its operations in Honduras, El Salvador, Nicaragua, Central African Republic, and Mozambique and it is consistently expanding within its existing markets organically.
Distribution Networks
The company has a strong distribution network of 37 warehouses and a fleet of owned vehicles across these 4 countries. It has stocked 476 new SKUs in FY22.
Subsidiary
The Co’s wholly-owned subsidiary, Balaxi Global DMCC (BGD) in Dubai has acquired 2 distribution companies in Central America viz. Balaxi Healthcare Guatemala and Balaxi Healthcare Dominican Republic as its subsidiaries and incorporated a new subsidiary in Central Africa as Balaxi Healthcare Centrafrique during FY21.
Acquisition
Balaxi Global DMCC, Dubai, a wholly-owned subsidiary of the Company has completed the acquisition of 99% shares of Balaxi Healthcare El Salvador, S.A DE C.V, El Salvador, Central America (BHES), which has consequently become the Step-down subsidiary of Co. and the Shares of the acquired Company were sold by Ashish Maheshwari who is the Managing Director of co.
Focus
The Company plans to set up a manufacturing facility in Hyderabad. It aims to gradually enter advanced markets like Europe.
Website
Location
Balaxi Pharmaceuticals Ltd is an IPR-based pharmaceutical Company engaged in producing, stocking, selling, and supplying branded and generic medicines. headquartered in Hyderabad, Telangana.
Leaders
Ashish Maheshwari is the Founder and Managing Director of the Company. He is a first-generation entrepreneur and a qualified Chartered Accountant. He started his entrepreneurial journey by supplying white-labeled pharmaceutical formulations to various importers. Today, the Balaxi Group has evolved into a conglomerate that spreads across four continents. His management philosophy is underpinned by his passion for knowledge, discipline, transparency, and accountability.
Minoshi Maheshwari is the current Non-Executive Director and Co-Founder of the company. A commerce graduate with 20 years of rich experience in the organization. Instrumental in creating Balaxi Group.A tenacious and persistent approach. A thought leader for the Group and also heads CSR activities for the group.
Amol Mantri is the current Chief Financial Officer. Mr. Mantri is a qualified Chartered Accountant and Certified Public Accountant from the USA. He has been associated with the Balaxi Group since 2012. He possesses inherent talent in designing and implementing systematic processes and checks and balances in all operations of the Company. He has a clear understanding of the Company’s business complexities, spread across four continents and seven countries.
Kunal Bhakta is the current Independent Director. A Chartered Accountant with 14 years of experience in the field of Capital Markets Currently, serves as an investment manager for First Water Capital Fund; A SEBI-registered listed markets AIF that Successfully executed multiple M&A, Capital Raise, and Investor Relations Strategy Engagements in his earlier roles at Lastaki Advisors Previously associated with Motilal Oswal as a lead Analyst post which he was by Co-founder at Foster Capital Ventures.
Highlights
- Despite external challenges, Balaxi’s performance in FY23 was satisfactory. company managed to navigate through the obstacles and achieve positive results. This success speaks to the resilience and determination of the team and its unique business model. the company remains committed to overcoming future challenges and driving the company towards even more significant accomplishments.
- During the year under review, higher contributions from the pharmaceuticals business led to y-o-y growth of 20% in revenues for FY23 compared to FY22. The share of LATAM markets increased to 40% of pharmaceutical revenues, highlighting the company’s ability to expand its geographical presence quickly.
- Key contributions to growth came from recently launched operations in markets like Honduras and El Salvador showing stronger demand for the company’s products, apart from substantial growth in Guatemala and Dominican Republic.
- In terms of EBITDA, operating EBITDA stood at Rs. 59.17 crore, a growth of 7.2% y-o-y. This was due to increasing contributions from LATAM markets and expansion into newer geographies.
- Earnings per Share (EPS) for the year was recorded at Rs. 45.81 compared to Rs. 47.66 in the previous year.
- company has achieved successful operational establishment in key markets, including Guatemala, the Dominican Republic, and Angola.
Products & Services
- Laxative
- hypotension
- local anesthetic
- hormones
- hygiene
- anti-ulcer
- Anti- helminthic
- steroid
- hypertension
- anti-malaria
- vitamins
- medical device
- Analgesic
- Anti-biotic
Profit & Loss
Expansions
- company has strengthened its market presence by introducing new operations in Honduras, El Salvador, and the Central African Republic. These expansions enable the company to serve its customers better and enhance our global footprint.
- The company has initiated expansion plans in Nicaragua, Ecuador, and Chile in Latin America. This reflects Balaxi Pharma’s commitment to continuous growth and market diversification.
- The company has a strong presence in Guatemala (Latin America), the Dominican Republic (Caribbean), and Angola (Africa), where it has successfully penetrated the market and established a solid customer base.
- By conducting thorough assessments and gaining valuable insights into these markets, the company is positioning itself for future growth and ensuring a well-formed approach to market entry.
Positives
- Company is almost debt free.
- Company has a good return on equity (ROE) track record: 3 Years ROE 47.3%
- Debtor days have improved from 71.3 to 56.7 days.
Negatives
- Latest P&L shows Loss
- Promoter holding has decreased over last quarter: -1.47%
Warren Buffett Checklist
| Factor | Value |
| Economic Moat | Moderate |
| Growth | Bad |
| Valuation | Good |
| Debt | Good |
| Integrity | Moderate |
Summary
Based on above evaluation the company have multibagger properties.
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