Knoll Pharma: Buyback on hold - Views on News from Equitymaster

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

  • MyStocks

MEMBER'S LOGINX

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

Knoll Pharma: Buyback on hold

Jun 18, 2002

Knoll Pharmaceuticals, (now a subsidiary of Abott Labs) has registered a marginal decline in sales for 1QFY03. However, a sharp rise in operating margins helped the company register a 53% rise in profits. Knoll Pharma is a leading player in the domestic insulin, anti-diabetic, pain control and antacid market.

(Rs m) 1QFY02 1QFY03 % Change
Sales 813 802 -1.4%
Other Income 25 48 92.0%
Expenditure 701 643 -8.2%
Operating Profit (EBDIT) 112 159 41.5%
Operating Profit Margin (%) 13.8% 19.8%  
Interest 1 0 -70.0%
Depreciation 11 15 40.0%
Profit before Tax 125 191 52.6%
Extraordinary Income      
Tax 33 50 51.5%
Profit after Tax/(Loss) 92 141 53.0%
Net profit margin (%) 11.3% 17.6%  
No. of Shares (eoy) (m) 16.2 16.2  
Diluted Earnings per share* 22.7 34.8  
P/E (at current price) 13.3 8.7  
(*- annualised)      

The rise in operating margins is on account of two reasons. The current year's financials received a boost on account of upward revision in prices of four formulations of insulin by NPPA last September. Secondly, last year, the company profits dipped following a cut in Ibuprofen prices by NPPA. Ibuprofen is a bulk drug used in pain management segment. As Knoll Pharma is a market leader in Ibuprofen market, the price cut had a severe impact on the company's financials in 1QFY02.

Knoll Pharmaceuticals Ltd had recently announced the buyback of 919,000 fully paid up equity shares from the existing shareholders through a tender offer at a price of Rs 350 per share. This represents around 14% of the free float of the company. However, pending certain regulatory approvals from SEBI, the buyback stands annulled for the time being. The latest available shareholding pattern is as follows:

The stock is currently trading at a P/e multiple of 9x FY02 earnings, a 16% discount to its proposed open offer price. The stock trades at considerable discount to its peers. Knoll Pharma’s financials are expected to look up in the short term, mirroring the Insulin price revision. However, in the long term competition is expected to set in quickly, threatening the leadership position of the company. Lot of domestic players like Glenmark, Wockhardt and Shanta Bio-tech already have clear plans to enter the insulin market. Considering the size and price of the proposed buyback offer, the stock price is expected to remain range bound in the near term.


Equitymaster requests your view! Post a comment on "Knoll Pharma: Buyback on hold". Click here!

  

More Views on News

ABBOTT INDIA Announces Quarterly Results (1QFY21); Net Profit Up 54.2% (Quarterly Result Update)

Aug 18, 2020 | Updated on Aug 18, 2020

For the quarter ended June 2020, ABBOTT INDIA has posted a net profit of Rs 2 bn (up 54.2% YoY). Sales on the other hand came in at Rs 11 bn (up 6.5% YoY). Read on for a complete analysis of ABBOTT INDIA's quarterly results.

ABBOTT INDIA Announces Quarterly Results (4QFY20); Net Profit Down 2.0% (Quarterly Result Update)

Jun 9, 2020 | Updated on Jun 9, 2020

For the quarter ended March 2020, ABBOTT INDIA has posted a net profit of Rs 1 bn (down 2.0% YoY). Sales on the other hand came in at Rs 10 bn (up 6.1% YoY). Read on for a complete analysis of ABBOTT INDIA's quarterly results.

More Views on News

Most Popular

How the 8-Year Cycle Can Help Identify Multibaggers (Fast Profits Daily)

Sep 11, 2020

This is how you can apply the greed and fear cycle in the market to pick stocks.

I Recommended this Stock over Page Industries because it's Relevant to Doubling Your Income (Profit Hunter)

Sep 7, 2020

Things are not often what they seem in the market and how you can take advantage of this.

The NASDAQ Whale Could Harm Your Portfolio (Fast Profits Daily)

Sep 7, 2020

The discovery of Softbank pushing up prices on the NASDAQ will cause volatility in the market. Stay alert!

This Could Be the Best September for Auto Stocks (Profit Hunter)

Sep 11, 2020

Here's why I think this month could be a great for auto stocks.

More

Covid-19 Proof
Multibagger Stocks

Covid19 Proof Multibaggers
Get this special report, authored by Equitymaster's top analysts now!
We will never sell or rent your email id.
Please read our Terms

ABBOTT INDIA SHARE PRICE


Sep 18, 2020 (Close)

TRACK ABBOTT INDIA

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

ABBOTT INDIA 8-QTR ANALYSIS

COMPARE ABBOTT INDIA WITH

MARKET STATS