In this article, we can explore the possibility of Gujarat Themis Biosyn Ltd as a Multibagger 2021 Stock based on Value Investing principles. Gujarat Themis Biosyn is primarily engaged in the business pertaining to manufacturing of pharmaceuticals and medicinal chemicals.
About Gujarat Themis Biosyn Ltd
Gujarat Themis Biosyn Limited was incorporated in 1981 as the joint sector company with GIIC Ltd. and Chemosyn (P) Ltd. GTBL started production in August 1985. It was subsequently taken over in June 1991 by the Yuhan Group South Korea and Pharmaceutical Business Group (India) Ltd. PBG is a unique consortium of five competing drug companies – Themis Medicare Ltd., Kopran Ltd., Anant & Co., Cadila Health Care Ltd. (Zydus) and Lyka Labs Ltd. It is being actively managed by Themis Medicare Ltd. (JV company of Gedeon Richter Ltd, Hungary) since 2007.
The Company committed itself to Technical & Financial collaboration with Yuhan Corporation, South Korea. With Yuhan’s expertise in the industry, GTBL became India’s first company to start commercial production of the Anti-tuberculosis drug Rifampicin. During the year installed capacity of rifamycin-S was increased to 90 mtpa and expansion of rifampicin was achieved to the maximum capacity of 120 mtpa. It also commenced operations of its new pharmaceutical division and launched a new wide range of anti-tuberculosis products and other antibiotics. The company is constantly identifying new areas for diversification and also the capacity expansion of the existing product in order to further reduction in the cost of production and increase turnover.
About Product Brands
GTBL is a biotech and synthetic product manufacturing company, having plants at Vapi, Hyderabad, with a group turnover of over $ 40 million. It has EDMFs, available and with plants that are approved by WHO.
The company has world–wide exports to satisfied customers, having customized facility for all products.
The company’s principal activity is to manufacture and distributes pharmaceuticals bulk drugs called rifampicin produced by the fermentation process. The company’s products include preparations of active pharmaceutical ingredient rifampicin and lovastatin. The company exports its products to Europe and the United States.
Business area of the company: Pharmaceuticals & Drugs
Warren Buffet, Value & Growth Checklist
|Capitalization||₹ 310 Cr.|
|Sales Increasing past 3 Year||Yes, 33.73%|
|Profit Increasing past 3 Year||Yes, 75.53%|
|Durable Competitive Advantage||Yes|
|Debt Equity Ratio||0.8%|
|Intrinsic Value Discount||48.45|
|Promoter Holding & Increase||48.50% no change|
|Multibagger Returns||300-500% 5 Year|
Business and Industry Analysis
- Gujarat Themis to manufacture & supply products to Lupin on revised terms: Gujarat Themis Biosyn has entered into an agreement for manufacturing & supply of finish product to Lupin on revised terms
- In the credit of GTBL, with each passing quarter the company has been improving its operating efficiency and it now has one of the best operating parameters in the industry. With the announcement of the supply agreement with Lupin, the company got solid visibility to its earnings.
- Gujarat Themis Biosyn Ltd has 101 number of employees
- The latest results show that the company has re-classified its business from contract manufacturing to bulk drug seller: During the year the company has changed its business model from contract manufacturing to supply model ie., Manufacturing and supply of pharmaceutical products to various parties.
- Upgrade from Contract Manufacturer to Manufacturer to Multiplier Companies & Having Strong Sales, Profit & EPS Growth
- High Revenue and Profit Growth with High Return on Capital Deployed (ROCE) and Low PE ratio
- High growth and High Return on Equity (ROE) with Low PE ratio
- Effectively using Shareholders fund – Return on equity (ROE) improving since last 2 year
- Efficient in managing Assets to generate Profits – ROA improving since last 2 year
- Quality Earnings: GTBL has high-quality earnings
- Growing Profit Margin: GTBL’s current net profit margins (37.8%) are higher than last year (22.1%).
- Earnings Trends: GTBL’s earnings have grown significantly by 52.2% per year over the past 5 years.
- Accelerating Growth: GTBL’s earnings growth over the past year (130.5%) exceeds its 5-year average (52.2% per year).
- Earnings vs Industry: GTBL’s earnings growth over the past year (130.5%) exceeded the Pharmaceuticals industry by 39.9%.
- Debt Level: GTBL’s debt to equity ratio (0.8%) is considered satisfactory.
- Reducing Debt: GTBL’s debt to equity ratio has reduced from 370.2% to 0.8% over the past 5 years.
- Debt Coverage: GTBL’s debt is well covered by operating cash flow (2163.1%).
- Interest Coverage: GTBL’s earns more interest than it pays, so coverage of interest payments is not a concern.
- Poor cash generated from core business – Declining Cash Flow from Operations for the last 2 years
- Weak Momentum: Price below Short, Medium and Long Term Averages
As per the R&D, this company is having Multibagger Potentials. However, this is not a Multibagger Recommendation. You should get paid Subscription to get the Real 500% Multibaggers. 3 Multibaggers immediately after payment.