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FDC Ltd

Stock Rating

Industry Rank:
18
Relative Strength Rating:
88
Very Strong
Acceleration in Earning Rating
54
Positive
Technical Rating
84
Very Strong
Pharmaceuticals & Drugs - Domestic
CMP: Rs 288.85
Up
No change
Down

Company details

Market cap:
4935.99
52-week high/low:
Rs. 281.70 / 151.20
NSE volume: (No of shares)
2,561,061.00
BSE code:
FDC
NSE code:
531599

Shareholding

(in %)
31-Mar
Promoter
69.24
Public
30.76
Others
0.0
Total
100

Indexed Stock Performance

FDC Ltd Sensex
FDC Ltd
One Year Performance

Price performance

Return (%)
1m
3m
12m
36m
Absolute
18.76
56.22
64.83
57.63
Sensex
15.75
36.37
-9.44
13.78

+91 22 6639 3000

research@stockaxis.com

FDC Ltd

It’s completely a “Fair Deal” based on high growth rates and attractive valuation. 

In 1940, the partnership firm was incorporated as a private limited company - Fairdeal Corporation (Private) Limited and in 1986 its name was changed to FDC Private Limited. Thereafter, FDC became a public limited company, and was listed on the Bombay and National Stock Exchanges of India in 1996.

Today, FDC carries forward the flaming spirit of its first dream, achieving accreditations from the US-FDA, UK-MHRA, MCC-RSA, and the UAE, to cite a few. FDC is a forerunner in manufacturing and marketing of Oral Rehydration Salts (ORS) and Ophthalmics. FDC has also set-up globally approved, multi-location manufacturing facilities for Active Pharmaceuticals Ingredients (APIs) as well as Finished Dosage Forms. These facilities are located at Roha, Waluj and Sinnar in Maharashtra, Verna in Goa and Baddi in Himachal Pradesh. FDC markets more than 300 products in India and exports many of these to over 50 countries.

FDC strives to explore, innovate and integrate solutions with modern technology, empowering talent and expanding healthcare horizons for a better quality of life to millions globally.  FDC Ltd. engages in the business of pharmaceutical. It involves in therapeutic segments, such as, anti-infectives, gastrointestinals, ophthalmologicals, vitamins, minerals, dietary supplements, cardiac, anti-diabetes, respiratory, gynaecology, dermatology, analgesics and others. The company products are sold under brand names, Electral, Enerzal, Vitcofol, Pyrimon, Zocon, Zoxan, Zathrin, Zipod, Zefu, Cotaryl and Mycoderm. The company was founded by Anand L. Chandavarkar on December 7, 1936 and is headquartered in Mumbai, India.

 

Investment Thesis

Top brands continues to be growth driver: FDC has strong presence in anti-infective, Oral Rehydration Salt (ORS), multivitamin, antifungal and nutraceutical segments with well-known brands in the domestic market. Three of the thirteen company’s brands grew faster than the market. These were: Zocon, Zifi-O and Simyl-MCT. The 13 major brands of the company contributed 62% to its domestic revenues. FDC’s antifungal brand Simyl-MCT grew the fastest at 13% YoY. We expect these brands to drive future growth. FDC markets Electral ORS and Enerzal nutraceutical brand in 200ml tetrapack at Rs23 and Rs30 per pack respectively. The tetrapack are outside price control and hence have higher margins. FDC promotes Enerzal as sports drink and markets the product at major sports events.  

Exports to grow steadily: The export business contributes around 17% of the revenue of FDC. The export business in FY19 delivered 30% growth mainly on account of strong formulation business growth of 154% in the US and UK markets. The API and the partner sharing business delivered growth of 30% while formulation business growth in ROW remained moderate.

Domestic formulations to continue growth trend:  The Company plans to continue focusing on growing its market share in Anti-infective, and antifungal. With some of the domestic business under price control, FDC plans to grow volumes as against competitors that are looking to achieve growth through upward price revisions.

Covid 19: Covid-19 would have a limited impact on FDC. As medicines are essential items has they have not been instructed to shut the plants. We believe there would be minimal Impact on FDC export business.

 

Key Risks

Currency Risk: Company is exposed to foreign currency risks as company's major sales are through exports.

Adverse impact of regulations: Regulations have been a biggest setback for the sector. Regulatory challenges include USFDA observations, Product approvals etc.

Financial Highlights

(Rs Crores)

Year EndMar-18Mar-19Mar-20Mar-21 EMar-22 E
Net Sales1075.071090.701344.191411.401580.77
Growth(%)6.04%1.45%23.24%5.00%12.00%
COGS352.08345.14425.71451.65497.94
Gross Profit722.99745.56918.48959.751082.83
Growth(%)7.14%3.12%23.19%4.49%12.82%
Employee Cost216.67225.57277.47296.39316.15
Other Expenses279.63288.96348.03352.85395.19
Total Expenditure848.38859.681051.211100.891209.29
EBITDA226.69231.01292.98310.51371.48
Growth(%)-6.89%1.91%26.83%5.98%19.64%
EBITDAM(%)21.09%21.18%21.80%22.00%23.50%
Depreciation35.1433.2437.4535.2836.88
EBIT191.55197.77255.53275.23334.60
Other Income50.9643.4768.8970.0070.00
Interest1.401.443.413.803.60
Profit Before Taxation & Exceptional Items241.11239.80321.01341.43401.00
Exceptional Income / Expenses0.00-1.110.000.000.00
Profit Before Tax241.11238.69321.01341.43401.00
Provision for Tax67.1266.8580.0886.04101.05
Tax rate(%)28.00%28.00%25.00%25.00%25.00%
PAT173.99171.85240.93255.39299.95
Share of Associate-0.48-2.06-1.01-1.01-1.01
Consolidated Net Profit173.51169.79239.92254.38298.94
EPS9.959.7413.9415.3918.10
Adjusted EPS9.959.7413.9415.3918.10
Source: Stockaxis Research, Company Data

Valuation

FDC’s key brands are continue to grow at good rates. We expect the same momentum to be continued in future. FDC has recently received ANDA approval gCospot (Opthalmic solution) and the product was launched in Q3 FY20 and the product has received good response in the market. We expect the export business to drive growth in next two years.  Company’s export business has registered high double digit growth in recent quarters. We remain positive on the company for long term.