Impressive results from E Merck - Views on News from Equitymaster

Helping You Build Wealth With Honest Research
Since 1996. Try Now

  • MyStocks


Login Failure
(Please do not use this option on a public machine)
  Sign Up | Forgot Password?  

Impressive results from E Merck

Apr 25, 2000

A 10% increase in sales has lead to tripling of profits at the net level. This has to do with the fact that last year the company provided Rs 27 m for the VRS payments to workers and closed its Taloja plant. However, even if one were to add this back to the last year's pre-tax profit, the net profit has still grown by 55%.

Besides, E Merck repaid almost a third of its borrowings last year which has led to a 32% decline in the interest payments and contributed to the surge in the bottomline.

(Rs m) FY99 FY00 Change
Sales 615 676 9.8%
Other Income 10 13 23.8%
Expenditure 575 589 2.5%
Operating Profit (EBDIT) 41 87 113.8%
Operating Profit Margin (%) 7% 13%  
Interest 10 7 -32.1%
Depreciation 17 21 20.8%
Profit before Tax 24 72 201.7%
Other Adjustments      
Tax 7 22 234.3%
Profit after Tax/(Loss) 18 51 189.7%
Net profit margin (%) 2.8% 7.5%  

E Merck derives almost 70% of the vitamins with three products Evion, Polybion and Neurobion contributing almost 45% of the company's turnover. All the three are under price control and are likely to remain that way for some time to come.

The company has introduced products in the cardiovascular and dermatological segments both of which are out of price control and these should boost revenues in the future.

The company's stock price performance is in sharp contrast to its fundamentals. In line with other pharmaceutical stocks the company's stock has also been hammered and actually touched its 52 week low (Rs 260) yesterday! This could be partially explained by the apprehension created due to a wrong news report which said that government has banned vitamins B1, B6 and B12 from January 2001. Since E Merck is the bigget player in this segment, this meant that the future revenues would be hit. However, the actual fiat was with respect of injectibles of an irrational combination of B1, B6 and B12 which has already been banned worldwide. Thus the company can continue selling these vitamins in the oral or injectable form except for the particular combination. However the fall in stock price represents a good opportunity for long term investors.

Equitymaster requests your view! Post a comment on "Impressive results from E Merck". Click here!


More Views on News

This Stock Just Made a Historical Debut on the Exchanges (Views On News)

Nov 15, 2021

Shares of the company listed at premium of 253% from its IPO price, the highest ever.

3 Indian Pharma Companies that are Investing Big Time for the Future (Views On News)

Nov 9, 2021

In 2021, R&D of pharma companies roared to life in a never-before-seen way.

Demerger of Financial & Pharma Businesses puts Piramal Enterprises in Limelight (Views On News)

Oct 8, 2021

The company's shareholders will be issued 4 shares in the demerged entity for every 1 held in Piramal Enterprises.

Block Deal Disappoints Max Healthcare Shareholders. Stock Falls 6% (Views On News)

Sep 30, 2021

The divestment of 6.6% stake by the promoter is considered to be one of the largest block deals of the market.

5 Indian Pharma Companies Riding the Vaccination Wave (Views On News)

Sep 3, 2021

These companies are likely to benefit the most from Covid-19 vaccines.

More Views on News

Most Popular

Infosys vs TCS: Which is Better? (Views On News)

Nov 26, 2021

In the post pandemic era, the top two IT companies in India are fighting to capture the growing demand for IT.

This Multibagger Stock Zooms 20% After Dolly Khanna Buys Stake (Views On News)

Nov 24, 2021

Shares of this edible oil company zoomed over 50% in three days after ace investor bought around 1% stake.

Don't Sell these Stocks if the Market Falls (Profit Hunter)

Nov 17, 2021

These are the 3 types of stocks that you should not sell in a market crash.

How to Find Your Next 10-Bagger in this Market (Profit Hunter)

Nov 19, 2021

The #1 make or break factor in your portfolio you shouldn't ignore.

6 Popular Stocks that Turned into Penny Stocks (Views On News)

Nov 27, 2021

A look at popular stocks that crashed big time and never recovered, i.e. which went from 'Multibaggers to Multibeggers'.


Become A Smarter Investor
In Just 5 Minutes

Multibagger Stock Guide 2022
Get our special report Multibagger Stocks Guide (2022 Edition) Now!
We will never sell or rent your email id.
Please read our Terms


Nov 30, 2021 (Close)


  • Track your investment in PROCTER & GAMBLE HEALTH with Equitymaster's Portfolio Tracker. Set live price alerts, get research alerts and more. Get access now...
  • Add To MyStocks