Dishman Pharma - Rating – Buy; Target Price – Rs150 - Centrum

- We expect Dishman Pharma's (DPCL) net sales to grow by 14.5%YoY and 5.0%QoQ to Rs3.72bn. We expect CRAMS business to report a growth of 19.6%YoY to Rs2.50bn. We expect the other business of marketable molecules (MM) to grow by 10.6%YoY to Rs1.20bn during the quarter.

- We expect DPCL's EBIDTA margin to improve by 220bps YoY to 22.0% from 19.8%.

- The company's vitamin D3 facility has re-started after upgradation. Hence DPCL's margins are expected to improve.

- DPCL is likely to benefit from the global short supply of vitamin D3 and has increased prices. The company is also likely to benefit from the supply of benzathonium chloride Quats to MNC companies for their hospital disinfectant formulations.

- We expect DPCL's net profit to improve by 28.0%YoY to Rs210mn.

- Our target price is based on 8xDec'15 EPS of Rs18.8 (earlier 6xSept'15 EPS).

- DPCL's stock had a smart run during the quarter due to the above developments and re-rating of the pharma sector.

Source : Equity Bulls

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