16 Sun Pharma
After being in the news for all the wrong reasons, things may finally be looking up for this Mumbai-based pharmaceutical major. The USFDA found irregularities in two of its plants, which impacted sales in the US, its largest market. The company’s profit took a hit due to lower revenue from the US and one-time costs incurred during the integration process with Ranbaxy. However, the consensus on the Street is that the worst maybe over. Recently, the company got an approval from the USFDA to manufacture a generic version of Novartis’ blockbuster drug Gleevec after settling a dispute with the company over the patent rights for the drug. It is expected that this will add $250 million to its revenue and another $25 million to profit by FY17. Also, the company has an ANDA pipeline of 445 drugs in the US, giving it a good revenue visibility.
15 Shemaroo Entertainment
With a content library featuring over 3,011 titles, Shemaroo Entertainment distributes content to both traditional and new media. Last fiscal, traditional media contributed 88% to revenue, while new media contributed 12%. Traditionally, the company generates an RoI of 18% and de-risks its business by acquiring movies well past launch stage, diversifying content into different genres and languages and monetising content through different platforms. Cable TV digitisation will give a fillip to broadcasters’ subscription revenue, leading to better monetisation and growth of traditional media, which is expected to grow at 12% CAGR for the company over the next few years.
At a time when the metal sector has lost its sheen amid a challenging macro-economic environment, this little-known non-ferrous engineering company has bucked the trend with its value-added product offerings. The Delhi-based firm produces non-ferrous alloys in the form of ingots, strips, sheets, plates, foils, bus bar, rods and even coin blanks. Its products are consumed by electrical and auto companies, defence establishments and the government too, is one of its customers. Last fiscal, Arcotech executed a government order for coin blanks of Rs 5 denomination. Over the past five years, the company’s bottom-line has grown at 35% CAGR, while top-line has grown at 49% CAGR. The company has plans for a greenfield project in Gujarat to manufacture aluminium semis.
13 Caplin Point Lab*
Caplin Point Laboratories is a pharmaceutical formulation player focused on exports of generic medicines, vitamins, suppositories as well as injectables to the US, Europe, Africa, South America and Southeast Asia. It is also involved in contract manufacturing of injectables and recently bagged an approval from Brazilian Health Authority to supply sterile injectables to companies in Brazil, its second biggest market after the US. The company gets advance payments for exports resulting in strong cash flows. It has also been able to pay off its debt completely over the past five years. The stock has also delivered impressive return of over 200% over the past year. While the company’s prospects look bright, any run-ins with the regulator could dampen its prospects in the US.
12 PC Jeweller
PC Jeweller (PCJ) manufactures, retails and exports both diamond and gold pieces. It has 56 showrooms spread across 47 cities in 17 states along with four jewellery-making units. It continues to focus on expanding showrooms across tier I and tier II cities. PCJ also retails online through its portal and has a tie-up with e-tailers Flipkart and Snapdeal. The company plans to increase the contribution of diamond jewellery as the margins are higher. In September 2015 quarter, the company’s revenue and profit increased by 41% and 18%, compared with the same period last year. Analysts expect revenue and profit to grow at a CAGR of 19% and 13%, respectively, over FY15-FY18.
Note: *Financial year ending June 2015 and 6-month data comprises trailing two quarters; For the rest financials as stated. Market-related data as on December 14, 2015; M-cap, PAT, sales, assets, cash and dividend in Rs.cr; CMP in ₹; PE and D/E in x; return and CAGR in %. Source: Ace Equity