E.Merck: Shifting focus - 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?  

E.Merck: Shifting focus

Sep 18, 2001

E.Merck (India), subsidiary of the German multinational Merck, reported a healthy topline performance for 2QFY02. While the company managed to log double digit topline growth operating margins were under pressure. The growth in sales is primarily due to an upward price revision in its vitamin brand Neurobion in June 2000.

(Rs m) 2QFY01 2QFY02 %Change FY01
Sales 791 881 11.3% 3,134
Other Income 9 38 346.3% 67
Expenditure 628 716 14.0% 2,582
Operating Profit (EBDIT) 163 165 1.0% 552
Operating Profit Margin (%) 20.6% 18.7% 17.6%
Interest 1 1 50.7% 23
Depreciation 15 24 59.9% 72
Profit before Tax 156 178 14.0% 524
Other Adjustments      
Tax 44 53 20.1% 139
Profit after Tax/(Loss) 112 125 11.7% 385
Net profit margin (%) 14.2% 14.2%   12.3%
No. of Shares (eoy) (m) 17 17   17
Diluted Earnings per share* 26.6 29.7   22.9
P/E (at current price) 9   12
(*- annualised)        

E. Merck is a market leader in vitamins and derives over 60% of its turnover from this segment. Three of its vitamin brands Evion, Neurobion and Polybion contribute almost 40% of the company’s turnover. During the first half of the current year the company re-introduced Neurobin with better marketing focus. However, the pharma division showed a sluggish growth of 3% mainly on account of competition from generic players. The slow growth in pharma division was more than compensated by a 20% growth in non-pharma division comprising laboratory and speciality chemicals.

One of the major threats to the company is high price volatility in Vitamin E due to fierce competition from Chinese and European suppliers. To overcome this concern, the company is evaluating various options like better utilisation of plant capacity and outsourcing of ingredients. Over the last couple of years the company has made a mark in other therapeutic segments such as cardiology, topical anti–inflammatory and dermatologicals while maintaining its mark in the vitamins segment. Apart from launching new products, the company also acquired Livogen brand from Glaxo India Ltd.

At the current market price of Rs 263, the stock trades at 12x times its FY01 earnings. Valuations going forward would depend on the success in new therapeutic areas, which the company has ventured into.

Equitymaster requests your view! Post a comment on "E.Merck: Shifting focus". Click here!


More Views on News

PROCTER & GAMBLE HEALTH Announces Quarterly Results (1QFY21); Net Profit Up 57.0% (Quarterly Result Update)

Aug 31, 2020 | Updated on Aug 31, 2020

For the quarter ended June 2020, PROCTER & GAMBLE HEALTH has posted a net profit of Rs 692 m (up 57.0% YoY). Sales on the other hand came in at Rs 6 bn (up 171.6% YoY). Read on for a complete analysis of PROCTER & GAMBLE HEALTH's quarterly results.

PROCTER & GAMBLE HEALTH Announces Quarterly Results (2QFY20); Net Profit Down 13.0% (Quarterly Result Update)

Nov 14, 2019 | Updated on Nov 14, 2019

For the quarter ended September 2019, PROCTER & GAMBLE HEALTH has posted a net profit of Rs 358 m (down 13.0% YoY). Sales on the other hand came in at Rs 2 bn (down 0.4% YoY). Read on for a complete analysis of PROCTER & GAMBLE HEALTH's quarterly results.

PROCTER & GAMBLE HEALTH 2017-18 Annual Report Analysis (Annual Result Update)

Aug 8, 2019 | Updated on Aug 8, 2019

Here's an analysis of the annual report of PROCTER & GAMBLE HEALTH for 2017-18. It includes a full income statement, balance sheet and cash flow analysis of PROCTER & GAMBLE HEALTH. Also includes updates on the valuation of PROCTER & GAMBLE HEALTH.

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.

Why We Picked This Small-cap Stock for Our Hidden Treasure Subscribers (Profit Hunter)

Sep 17, 2020

This leading household brand will profit big time in a post covid world.

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.

What Do the Charts Say About Buying Smallcaps Now? (Fast Profits Daily)

Sep 18, 2020

Everyone seems to be excited about buying smallcaps now...but is it the right thing to do? What do the charts tell us? Find out in this video...


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


Sep 24, 2020 (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