NOVARTIS INDIA LTD - BUY

Novartis India is  76% subsidiary of Swiss drug major Novartis AG.Company's Indian operations can be classified into Pharmaceuticals,  Generics, OTC  and  Animal Health.Novaris have some good brands like Voveran,Otrivin  ..etc Company also own some popular brands like Sandimmun, Neoral,Tegrital.
In the animal health division company's brands include Natuzyme,Denagard..etc.
In 2009 ,company came out with an open offer and raised the parent's stake to current level.
In recent times company showing aggressiveness in development and marketing of new products especially in
Cough, Cold, and Allergy category. Reflection of the same is already visible in its financials.
For the latest December quarter company posted a turnover of Rs.184 Cr ( Rs.160 Cr) and a net profit of RS.41 Cr (Rs.23 Cr)  Full year EPS is expected around Rs.48/-.Along with good prospects of pharma industry in India due to increasing health awareness and government focus,company's better commitment after hiking its parent's stake is expected to augurs well for Novartis going forward.At CMP of  Rs.622,Novartis is a good bet from pharma sector.

NEULAND LABORATORIES LTD - TURNAROUND PERFORMANCE

Traditionally ,Pharmaceutical companies are known as defensive bets .It also giving reasonable return in bull market ,that is why conservative investors are always giving preference for pharma companies in their portfolio. Considering the chances for  low cost manufacturing and recession proof(to some extent) status of the business R&D driven pharma companies are always catching market attention. Neuland Laboratories is such a company from Hyderabad started in 1984. Neuland is promoted by Dr D R Rao and its board is supported by eminent personalities includes Mr Humayun Dhanrajgir (Former MD of Glaxo India), P V Maiya  (Former chairman of ICICI Bank) Mr SP Budhiraja(Former MD of  IOC) ..etc. Company is in the manufacturing of Active Pharmaceutical Ingredients(API’s) ,Contract Research and manufacturing (CRAM) and Clinical research. It also started the production of Peptides last year. Neuland having two USFDA approved manufacturing units ,one at Bonthapally and  other at Pashamylaram  near Hyderabad and exporting its products to more than 40 countries worldwide..It also have a strong R&D with 165 scientists. Company is one of the largest manufacturer of Ranitidine in India.Neuland’s sales in segment wise is as follows, 45% from Quinolones ,18 % Cardiovascular,16% CNS,10% Anti Ulcerants,4% Anti Asthma and rest from others. Company having two subsidiaries Neuland laboratories KK Japan and Neuland Laboratories Inc USA. Recently company started a joint venture with  Cato Research Israel to offer clinical research services in India .Neuland owns 70% stake in this new company called Cato Research Neuland India Pvt.Ltd.  Neuland’s R & D division has identified 13 new products for development in this year.

Financials

In the history of last 10 years ,Neuland posted a loss ( Rs.7 Cr )in last year with a sales of Rs.282 Cr.This is mainly because of the  production disruption  due to renovation of plants, unfavorable exchange rate and some regulatory problem of one of its products. Most of these problems are stabilized now and company is expecting better days ahead. Company has taken various cost cutting measures and steps  for the optimum utilization of its resources. For the last two years ,Neuland made heavy investment in infrastructure including production facilities ,R&D and

H R. Benefits of these efforts are also expected to start from this year. It is a point to note that before the loss making last year ,in two previous years ,company posted EPS more than Rs.20/- and paid hefty dividends to share holders.Now the management is confident to achieve better results ahead and their optimism seems to be true based on the September qtr numbers. In the latest qtr Neuland posted a turnover of Rs.101 Cr v/s Rs.61 Cr and a net profit of Rs.3 Cr v/s Rs.70 lac .On an equity base of Rs.5.47 Cr ,company posted an EPS of Rs.5.30/- in latest qtr .Even after deducting the loss in first qtr ,it is expected to perform very well on a full year basis. A good management with transparency, integrity  and ethics is the big positive of this Company. Currently Neuland is trading @ Rs.119/-  which is even below its book value of Rs.126 /-. One may consider a BUY at current level with medium to long term view for decent return.

RANBAXY LAB - BUY

India's largest pharma company not need any explanation for the investors. After the take over of Daiichi Sankyo ,initial hiccups on integration of management is almost over .Under the new leadership,company is expected to perform well going forward.In the latest qtr ,Ranbaxy's domestic sales posted very good performance but it partially offset by the not so good sales outside.Company is expected better performance in near future due to the beginning of the supply of Nexium API and formulations.In an effort to strengthen its local sale,company recently recruited more than 1000 field staff.All these efforts under the new management is expected to help the company to capture the past glory. Investors can add Ranbaxy  in their portfolio for long term gains.Considering the volatility in the  market ,it is better to buy in small lots.CMP is Rs.570/-

JENBURKT PHARMACEUTICALS LTD - BUY

Jenburkt  Pharma (BSE CODE -524731) is promoted by Mr. Hemendra N. Bhuta in 1985 and currently lead by Mr. Uttam N. Bhuta. Company’s  headquarters is in Mumbai and WHO approved  plant is located in Gujarat. Jenburkt is a manufacturer of various category of medicines includes Antibiotics,Anti-diabetics,Anti-inflammatory,Dermatology..etc.Along with this ,company is also making a sugar substitute with the brand name ‘NOCAL’ under the consumer division. Company is growing steadily for the past few years and it is planning to concentrate in high margin products going forward. It also planning to pay much attention to introduce more products under its consumer division. For the full year ended March 2010,company posted a turnover of Rs.52.6 Cr ( Rs.43.7 Cr) and a net profit of Rs.3.8 Cr( Rs.1.6 Cr) .On an equity base of 4.6 Cr  EPS was at Rs.8.13 . In the latest June qtr Company posted an EPS of Rs.2.85 v/s 0.86 .Company also having an uninterrupted dividend paying history for the  last five years .In FY 2010 company paid a dividend of  30 % for FV 10 shares.Promoters are aggressively hiking their stake through open market purchases is also a positive factor. Medium term investors can consider this Pharma company as a value BUY
@ CMP of Rs.85/-

ORCHID CHEMICALS AND PHARMACEUTICALS Ltd -BUY

Orchid Chemicals and Pharmaceuticals is a 1300 + Cr pharma company based in
Chennai promoted by  Mr.K Raghavendra Rao
Orchid is the largest manufacturer of
Cephalosporin in India and one of the top
five in the world.Company has strong presence
in API and formulation segment.It is very strong
in R&D and has a special R&D wing in the name
of Orchid Research Laboratories with more than
130 scientists.Orchid's plants are approved by
various foreign agencies like US FDA and the
company is one of the largest exporter from India.
Last year was a disaster for orchid mainly
because of its huge debt burden and foreign
currency loss.Inorder to de-leverage ,company last
year sold its generic injectable finished dosage
business to 'HOSPIRA' and repaid loans worth
Rs.1400 Cr using part of this realisation .
Using part of the balance fund ,Orchid recently
aquired a company named Karalex Pharma .
This aquisition will be a boost for its marketing
efforts in US over next few years.company's bad times
are almost over and it is expected to post better
perfomance in the years to come.Orchid is expected
to post a turnover of Rs.1270 Cr and a net
profit of Rs.85 + Crore in current financial year .
Company recently declared a dividend
of Rs.10/- each (100%) too.  Moreover after the reduction in debt
Orchid is a perfect takeover target due to its large size ,
quality of operations ,well established R&D and comparatively
low promoter stake At current market price of Rs.161 /- ,
Orchid is a decent BUY.