Investment Ideas - Lupin Pharmaceuticals Inc

Company profile
Lupin Chemicals Ltd came into being in 1983. In the year 2001, Lupin Laboratories Ltd was amalgamated with the company and the name was changed to Lupin Ltd.
In the year 1987, the company’s  Cephalexin Plant at Mandideep and 7 ADCA plant at Ankleshwar were started. In 2006, the company started commercial production at Jammu. They also operate a dosage production facility at Indore. Lupin has established itself into a leading manufacturer of cephalosporin API’s and in the cardiovascular segment.

Acquisitions
The Company’s acquisition list is quite large.

In the year 2003, Lupin Pharmaceuticals Inc. was formed in USA, to expand the companies  marketing  activities in the US. In the year 2007, the company acquired Rubamin Laboratories Ltd   a Vadodara based company. In Japan Kyowa Pharmaceutical Industry Company Limited, a leading Generic Company was acquired. In the year 1989, the company formed joint venture in Thailand, known by the name Lupin Chemicals (Thailand) Ltd.

During the course of 2008-09, the company concentrated in the Japanese market and received approval from Ministry of Health & Labour Welfare for ten products. Hormosan Pharma GmbH, a generic company in Germany was acquired in this period. The Company holds 36.65% stake in Generic Health Pty Ltd., in Australia, 60% stake in Pharma Dynamics in South Africa and 51% stake in Multicare Pharmaceuticals Philippines Inc in Philippines.
During the year 2009-10, Lupin (Europe) Ltd, UK and Lupin Pharma Canada Ltd, Canada were incorporated. Lupin Holding B V, the Netherlands came under Lupin through Max Pharma Pty Ltd, Australia, which is a wholly owned subsidiary. In January 2010,  Novodigm Ltd, Lupin Pharmacare Ltd and Lupin Herbal Ltd, were amalgamated with the company. In August 23, 2010, the company incorporated Lupin Mexico SA de CV, Mexico as a subsidiary company. This year also saw the increase in stake in Generic Health Pty Ltd., (Generic), Australia, from 49.91% to 76.65% Due to this raise of stake three other companies, Bellwether Pharma Pty Ltd., Australia, Generic Health Inc., U.S.A. and Max Pharma Pty Ltd., Australia, became subsidiaries of Lupin.

Another two companies incorporated were Lupin Philippines, Inc., Philippines and Lupin Healthcare Ltd., India, as subsidiaries in 2011. This year also saw the acquisition of I’rom Pharmaceuticals. In June 2011, Lupin got worldwide rights for the Goanna Brand and the complete range of premium therapeutic oils, rubs and ointments. 

Product range

The company has lined up an impressive range of products, both generic and branded formulations. The company also deals with  Active Pharmaceutical Ingredients (APIs).
The company's product range begins from Cephalosporins, CVS, CNS, Anti-Asthma, Anti-TB, Diabetology, Dermatology, GI, and other therapy segments. Their APIs products include antibiotics, Antibiotics, ANTI-TB, Cardiovasculars, Central Nervous System, Analegesics and ANTI-GOUT, Injectable cephalosporin

Financials

According to openly available data net sales of the company have increased from 5315.89 of last year to 7010.49 cr. This is an increase of 1694.60 Cr. Other operating income has risen to 112.02 which is also higher than last year’s 68.94 Cr.  This makes the total income of the company 7122.51 an increase of 1737.68 Cr. from last year’s figure of 5384.83 Cr. Cost of Employees has increased by 131.86 Cr. totaling 713.08 Cr. Other expenses totals 2004.71 Cr. Net profit stands at 1260.43 Cr.( after tax). The company’s reserves stand at 4757.20 as against 3645.08 last year. The Basic EPS stands at 28.9 against 18.02 last year. The diluted EPS is 28.07 as against 17.94 last year.

At the time of writing this note, in a latest news Lupin Ltd has informed BSE that its Board of Directors of the Company, has recommended dividend @ 200% i.e. Rs. 4/- per share of the face value of Rs. 2/- each for the year ended March 31.The Company's shares were trading at Rs.751.25.

Shares of the Pharma sector are always considered as a safe investment for various reasons. Putting together all available data collected we can be assured that this company has a good potential to do well in times to come. This company’s shares could be bought on dips for short term and long term investments.

Disclaimer: I do not hold any shares or any other interest in this company

Investment Ideas - Dr.Reddy's Laboratory

 Dr. Reddy’s beginning was in 1984, when The Company was established by Dr Anji Reddy with an initial capital of Rs 25 lakhs. Their maiden production was high quality Active Pharmaceutical Ingredients, mainly catering to the Indian Market.  Today it has expanded their activity to  Active Pharmaceutical Ingredients (APIs), Custom Pharmaceutical Services (CPS), generics, and biosimilars, The company employs over 2700 representatives and one of the biggest Indian Pharmaceutical Company. It has turned itself into a 200 million worth of Pharma venture. It started manufacturing finished products in the 1986 when it launched Norilet. Since then the company has regularly updated its presence in the market by launching more medicines addressing major areas like gastro-intestinal, oncology, pain management, cardiovascular, dermatology, diabetes, anti-infective, paediatrics and so on. 

The company’s international operations started around 1991.Ttheir major markets include, USA, Russia and CIS, Germany, UK, Venezuela, S. Africa, Romania, and New Zealand.

Acquisitions
In the year 1988, they acquired Benzex Laboratories Pvt Ltd to expand their business
In the year 1999, the company acquired American Remedies Ltd, an Indian  pharmaceutical company. Cheminor Drugs Ltd, was merged with the company in the year 2000. The first overseas acquisition  was in the year 2002 when it acquired  BMS Laboratories Limited and Meridian Healthcare in UK.

In the year 2006, the company acquired a German company called Betapharmthis company was one of the largest generic drug company in Germany.

During the year 2008-09 many acquisitions were done. The company acquired DowPharma's small molecules business in UK under Chirotech Technology Ltd, BASF Corporation's manufacturing facility at Shreveport in Louisiana, USA- Dr. Reddy's Laboratories Louisiana LLC and Jet Generici SRL,in Italy.
In the year 2003 they launched their first generic product, Ranitidine, in the US market. Also , they launched Ibuprofen, first generic product to be marketed under the 'Dr. Reddy's' label in the US. Exports commenced with the drug  Methyldopa. In the year 1987, the company obtained first US Food and Drug Administration, approval for Ibuprofen.. In the year 1990, they exported Norfloxacin and Ciprofloxacin to Europe and Far East. In the year 1991, they started exports to Russia, Later joint ventures were in established in Russia

Subsidiaries.
In the year 2005, they acquired Roche's API Business at its manufacturing site in Mexico. Perlecan Pharma Pvt Ltd and Macred India Pvt Ltd became the company’s subsidiaries. Another company -  Dr. Reddy's Laboratories ILAC Ticaret also brought under the arm of  the company. In the year 2009-10, Dr. Reddy's Pharma SEZ Ltd became  a wholly-owned subsidiary of the company. This unit was put into use for manufacturing at Special Economic Zones. Perlecan Pharma Pvt Ltd was another company which was merged with the company. In the overseas, the company completed the acquisition of its balance stake of 30% in Dr. Reddy's (Australia) Pty Ltd. In the USA the company acquired GlaxoSmithKline's (GSK) oral penicillin manufacturing facility, in Tennessee.

Dr. Reddy's Laboratories Romania SRL, I-Ven Pharma Capital Ltd, Dr. Reddy's Laboratories Tennessee LLC and Dr. Reddy's Venezuela C.A., Dr. Reddy's Laboratories (Proprietary) Ltd also became wholly-owned subsidiaries of  the company.

These arrangements could be seen as strengthening of the existing business or forging new strategies for marketing its own formulations.

The Dividend history of the company is also impressive. In the last two years of 2011 and 2012, it has paid 225%, 275% respectively. The EPS has been 53.81(Rs).At the time of writing this notes the companies share were trading at all time high ahead of Jan- March earnings reports. (Rs. 2085)

The background of the company and its past performance makes this reliable Indian Pharmaceutical Company, a must have in portfolio stock. Shares can be accumulated on dips and held for a longer time frame.

Disclaimer: I do not hold any shares or any interest in the company.