Sign up for Equitymaster's free daily newsletter, The 5 Minute WrapUp and get access to our latest Multibagger guide (2017 Edition) on picking money-making stocks.

This is an entirely free service. No payments are to be made.

Download Now Subscribe to our free daily e-letter, The 5 Minute WrapUp and get this complimentary report.
We hate spam as much as you do. Check out our Privacy Policy and Terms Of Use.
German Remedies: Time for a relook? - Views on News from Equitymaster
  • E-MAIL
  • A  A  A
  • Sep 26, 2000

    German Remedies: Time for a relook?

    Last week’s bloodbath took a toll on the valuations of quite a few fundamentally sound stocks. One such stock is German Remedies (GRL). The stock actually touched its 52–week low of Rs 487, before closing at Rs 490 yesterday. Thus it has come off almost 65% from its highs of Rs 1388 touched during the year.

    GRL is owned by a group of German drug companies Boehringer Ingelheim, Asta Medica, Schering AG, Heller Vermog and Beecham Pharma GmbH. These companies today own around 37% of the company’s Rs 82.45 m equity. The highest shareholding is that of Asta Medica which currently owns over 20% of the company's equity. Asta Medica specialises in oncology (anti–cancer) and respiratory drugs.

    Over the last two years GRL has introduced 12 new formulations and discontinued 4 products. These products have been the key drivers of topline growth. It's main products include Deriphyllin (for bronchitis), Dulcolax (laxatives), Primolut N and Proluton (both for hormonal imbalances). All these brands are within the top 250 brands of ORG and contribute over 25% to the company's turnover. Both Deriphyllin and Dulcolax are market leaders in their respective market segments.

    Key Products
    Product Collaborator Therapeutic area
    Deriphillin Asta Medica Anti–asthamatic
    Endoxan Asta Medica Anti–cancer
    Primolut–N Schering AG Oral progestogen
    Proluton Depot Schering AG Injectable progestogen
    Dulcolax Boehringer Ingelheim Laxative
    Duoluton–L Schering AG Menstrual cycle regulator
    Holoxan Asta Medica Anti–cancer

    The company has a strong marketing set up with around 20 C & F agents and 550 distributors. As far as the financials are concerned GRL has reported a 15.8% compounded growth in turnover over the past three years and a 40% growth in net profits over the same period. In FY 2000 its cash flow from operating activities nearly doubled from Rs 159.5 m to over 290.6 m. These were used to primarily to reduce the company’s debt from a level of Rs 136 m to Rs 55 m. Also, its Return on Net Worth and Return on Capital Employed (i.e. profit before interest, depreciation and tax divided by capital employed) worked out to 28% and 40% in FY 2000.

    In the first quarter of the current year the company has reported a 10% growth in the topline to 468 m and a 14.9% growth in the bottomline. This performance seems to have disappointed the market since it’s in line with the growth in the overall pharma market whereas the bigger boys such as Glaxo have reported a relatively better performance. The annualised per share earnings works out to Rs 20.9 which implies an earning multiple of 23 times.



    Equitymaster requests your view! Post a comment on "German Remedies: Time for a relook?". Click here!


    More Views on News

    Sun Pharma: Bottomline Slips into the Red Amidst Challenging Environment (Quarterly Results Update - Detailed)

    Aug 14, 2017

    A challenging environment and one-time expense pushes Sun Pharma into a loss in the first quarter.

    Lupin: Bigger Challenges or Bigger Margin of Safety? (Quarterly Results Update - Detailed)

    Aug 14, 2017

    GST impact coupled with price erosion in US leads to lower profits for the quarter.

    Dr Reddy's: US Pressure Continues to Haunt (Quarterly Results Update - Detailed)

    Aug 8, 2017

    Profits plunge due to higher raw material costs.

    The Power of 5 Minutes (The 5 Minute Wrapup)

    Jun 16, 2017

    Here's what you can expect from The 5 Minute Wrapup in the coming months and years.

    Biocon: Lower Licensing Income Leads to Muted Growth for the Quarter (Quarterly Results Update - Detailed)

    Jun 23, 2017

    Net Profit lower due to exceptional items in the previous year.

    More Views on News

    Most Popular

    A 'Backdoor' to Multibaggers: It's Like Investing in Asian Paints Ten Years Ago(The 5 Minute Wrapup)

    Aug 10, 2017

    Don't miss these proxy bets on growing companies or in a few years you will be looking back with regret.

    The Most Important Innovation in Finance Since Gold Coins(Vivek Kaul's Diary)

    Aug 10, 2017

    Bill connects the dots...between money and growth, real money and real resources, gold and cryptocurrencies...and between gold, cryptocurrencies, and time.

    Signs of Life in the India VIX(Daily Profit Hunter)

    Aug 12, 2017

    The India VIX is up 36% in the last week. Fear has gone up but is still low by historical standards.

    Bitcoin Continues Stellar Rise(Chart Of The Day)

    Aug 10, 2017

    Bitcoin hits an all-time high, is there more upside left?

    5 Steps To Become Financially Independent(Outside View)

    Aug 16, 2017

    Ensure your financial Independence, and pledge to start the journey towards financial freedom today!

    Copyright © Equitymaster Agora Research Private Limited. All rights reserved.
    Any act of copying, reproducing or distributing this newsletter whether wholly or in part, for any purpose without the permission of Equitymaster is strictly prohibited and shall be deemed to be copyright infringement.

    LEGAL DISCLAIMER: Equitymaster Agora Research Private Limited (hereinafter referred as 'Equitymaster') is an independent equity research Company. Equitymaster is not an Investment Adviser. Information herein should be regarded as a resource only and should be used at one's own risk. This is not an offer to sell or solicitation to buy any securities and Equitymaster will not be liable for any losses incurred or investment(s) made or decisions taken/or not taken based on the information provided herein. Information contained herein does not constitute investment advice or a personal recommendation or take into account the particular investment objectives, financial situations, or needs of individual subscribers. Before acting on any recommendation, subscribers should consider whether it is suitable for their particular circumstances and, if necessary, seek an independent professional advice. This is not directed for access or use by anyone in a country, especially, USA or Canada, where such use or access is unlawful or which may subject Equitymaster or its affiliates to any registration or licensing requirement. All content and information is provided on an 'As Is' basis by Equitymaster. Information herein is believed to be reliable but Equitymaster does not warrant its completeness or accuracy and expressly disclaims all warranties and conditions of any kind, whether express or implied. Equitymaster may hold shares in the company/ies discussed herein. As a condition to accessing Equitymaster content and website, you agree to our Terms and Conditions of Use, available here. The performance data quoted represents past performance and does not guarantee future results.

    SEBI (Research Analysts) Regulations 2014, Registration No. INH000000537.

    Equitymaster Agora Research Private Limited. 103, Regent Chambers, Above Status Restaurant, Nariman Point, Mumbai - 400 021. India.
    Telephone: +91-22-61434055. Fax: +91-22-22028550. Email: info@equitymaster.com. Website: www.equitymaster.com. CIN:U74999MH2007PTC175407

    Become A Smarter Investor In
    Just 5 Minutes

    Multibagger Stocks Guide 2017
    Get our special report, Multibagger Stocks Guide (2017 Edition) Now!
    We will never sell or rent your email id.
    Please read our Terms


    Aug 21, 2017 (Close)