Beta Drugs Limited

Beta Drugs Limited is pharmaceutical formulation manufacturing company engaged in developing, manufacturing and marketing of drug products for domestic and international customers. Beta Drugs is primarily engaged in the manufacturing of oncology products. The products include anti-cancer tablets, capsules, injections and lyophilized injections. Company has portfolio of over 50 products which is used for the treatment of various cancer diseases. Beta Drugs Limited is a part of Adley Group, which was founded in the year 1985. Company's manufacturing unit is located at Solan, Himachal Pradesh. Company Strengths:1. Focus on oncology segment. Manufacture over 50 products in this segment.2. 18 product registrations in various countries. Company is in-process of making additional 12 applications for product registration in various countries. On performance front, BDL has posted turnover/net profits of Rs. 1.38 cr. / Rs. 0.02 cr. (FY14), Rs. 0.26 cr. / Rs. 0.11 cr. (FY15), Rs. 26.39 cr. / Rs. 1.13 cr. (FY16) and Rs. 41.68 cr. / Rs. 5.18 cr. (FY17). Thus for last two fiscals it has shown improving performance. It has reported an average EPS of Rs. 4.95 and average RoNW of 50.48% on an equity base of Rs. 1.01 crore. Issue is priced at a P/BV of around 6.86, If we attribute latest earnings on fully diluted equity post issue, then asking price is at a P/E of 14 plus against peers trading in the range of 22 to 46 P/Es. Thus issue is priced reasonably. On merchant banker’s front, this is the 52nd mandate from its stable. Out of last 10 recent listings, 1 opened at discount, 1 at par and the rest with 1 to 18% premium on IPO price. As per financials, company's growth is very healthy except FY15, RoNW is 50.48% for last three fiscals and issue is reasonably priced as per industry average. So we give SUBSCRIBE rating to this SME IPO.

• 1 Mr Vijay Kumar Batra