Company Details

Sharon Bio-Medicine Limited develops, manufactures, and sells intermediates,

active pharmaceutical ingredients (APIs), and finished dosage products in India

and internationally. The company provides its APIs in a range of therapeutic areas,

including anti depressant, anti hypertensive, anti fungal, anti diabetic, anti bacterial,

anti Alzheimer, anti psychotic, anti protozoal, anti diarrhoeal, and cardiovascular

areas, as well as veterinary, pro-kinetic, NSAID, and muscle relaxation areas. Its

intermediate product line targets various API/end uses, such as ketoconazole,

itraconazole, phase transfer catalyst, lansoprazole, trimetazidine, chemical

synthesis, glibenclamide, glimepiride, amlodipine besylate, and sertraline HCL. The

company also offers formulations in the therapeutic segments of oncology,

antibiotics, dermatology, liquid orals, soft gelatin capsules, and suppositories. In

addition, it provides clinical services, as well as various toxicology services related

to animals. Sharon Bio-Medicine Limited was incorporated in 1989 and is

headquartered in Mumbai, India.

The current market capitalisation stands at Rs 386.38 crore.The company has

reported a consolidated sales of Rs 349.52 crore and a Net Profit of Rs 20.54 crore

for the quarter ended Jun 2014.

CategoryNo. of

SharesPercentage

Promoters 63,551,980 60.20

Other Companies 27,063,994 25.64

General Public 11,301,609 10.71

Foreign - OCB 1,500,000 1.42

Foreign Institutions 1,056,252 1.00

Others 731,191 0.69

Foreign - NRI 286,280 0.27

Foreign Industries 67,129 0.06

Financial Institutions 10,565 0.01

Market Cap (Rs Cr) – 386.38

Company P/E – 5.34

Industry P/E – 24.35

Book Value (Rs) – 24.95

Dividend (%) – 18%

EPS (TTM) – 6.85

Dividend Yield (%) – 0.98%

Face Value (Rs) -2

Share Holding Pattern Financial Details

Industry Details

The biotechnology sector of India is one of the most significant sectors in enhancing India's global profile as well as

contributing to the growth of the economy. This sector is directly or indirectly related to the health as well as the

agricultural sector of India.

India is among the top 12 biotech destinations in the world and is the largest producer of recombinant Hepatitis B

vaccine. Out of the top 10 biotech companies in India (by revenue), six focus their expertise in bio-pharmaceuticals

and four specialize in agri-biotech.

India had recently overtaken Canada to emerge as the fourth largest country to grow biotech or genetically modified

(GM) crops, as farmers here planted Bt cotton in about 11 million hectares. The global acreages under GM crops

increased to 175.2 million hectares in 2013, about five million hectares more than the previous year.

India also has no dearth of talent in this sector, as a number of institutions, both government and autonomous, provide

the necessary opportunities for the student seeking to obtain a degree in this sector. Also, the Government of India

has provided adequate scope to this sector by providing facilities for research and development (R&D) in the field of

biotechnology.

The Indian biotech industry holds about 2 per cent share of the global biotech industry. With the growth in the

customer base and more investments taking place in the biotech sector, the biotech industry is expected to grow to

around US$ 73.73 billion by the year 2020. The high demand for different biotech products has also opened up scope

for the foreign companies to set up bases and reap great profits.

The biotechnology industry in India, comprising about 400 companies, has grown three-fold in the last five years to

reach US$ 4 billion in FY 13. Growing at an average rate of about 20 per cent, India's biotech industry comprising

biopharmaceuticals, disservices, bio-agriculture, bio-industry and bio-informatics could reach the US$ 7 billion mark

by FY 15.

Balance Sheet

Jun '14 Jun '13 Jun '12 Jun '11 Jun '10

Sources Of Funds

Total Share Capital 21.11 10.56 10.56 10.56 10.56

Equity Share Capital 21.11 10.56 10.56 10.56 10.56

Share Application Money 80.56 54.75 54.75 54.75 8.01

Reserves 250.64 186.36 179.71 138.61 107.67

Revaluation Reserves 0.00 0.00 0.00 0.36 0.36

Networth 352.31 251.67 245.02 204.28 126.60

Secured Loans 558.59 441.37 316.71 257.09 211.44

Unsecured Loans 166.79 202.52 145.70 86.53 131.12

Total Debt 725.38 643.89 462.41 343.62 342.56

Total Liabilities 1,077.69 895.56 707.43 547.90 469.16

Application Of Funds

Gross Block 380.87 317.87 235.62 206.42 201.11

Less: Accum. Depreciation 55.85 46.33 34.29 25.57 17.34

Net Block 325.02 271.54 201.33 180.85 183.77

Capital Work in Progress 14.93 42.82 59.90 27.04 22.74

Investments 0.59 3.34 3.34 3.24 3.49

Inventories 322.45 260.24 196.22 155.21 116.67

Sundry Debtors 422.61 363.52 268.22 202.92 170.18

Cash and Bank Balance 12.34 6.32 6.31 1.20 1.30

Total Current Assets 757.40 630.08 470.75 359.33 288.15

Loans and Advances 71.53 32.11 46.15 22.53 12.32

Fixed Deposits 0.00 0.00 0.00 2.66 1.10

Total CA, Loans & Advances 828.93 662.19 516.90 384.52 301.57

Current Liabilities 73.79 69.94 62.19 41.10 36.75

Provisions 17.99 14.38 11.85 6.65 5.66

Total CL & Provisions 91.78 84.32 74.04 47.75 42.41

Net Current Assets 737.15 577.87 442.86 336.77 259.16

Total Assets 1,077.69 895.57 707.43 547.90 469.17

Book Value (Rs) 25.74 186.53 180.23 141.30 111.99

Profit and Loss Account

Jun '14 Jun '13 Jun '12 Jun '11 Jun '10

Income

Sales Turnover 1,324.79 1,073.52 804.14 626.81 522.98

Net Sales 1,324.79 1,073.52 804.14 626.81 522.98

Other Income 1.93 1.19 1.21 1.25 -0.46

Stock Adjustments 62.21 64.02 41.00 38.55 27.01

Total Income 1,388.93 1,138.73 846.35 666.61 549.53

Expenditure

Raw Materials 1,185.17 979.09 714.58 561.64 468.29

Power & Fuel Cost 8.77 8.27 7.27 6.76 5.47

Employee Cost 19.16 14.71 14.50 5.34 5.20

Other Manufacturing Expenses 0.00 0.00 2.56 10.78 7.64

Selling and Admin Expenses 0.00 0.00 0.00 6.60 6.55

Miscellaneous Expenses 16.40 14.44 10.11 1.86 1.22

Total Expenses 1,229.50 1,016.51 749.02 592.98 494.37

Operating Profit 157.50 121.03 96.12 72.38 55.62

PBDIT 159.43 122.22 97.33 73.63 55.16

Interest 58.63 43.06 34.26 26.81 21.00

PBDT 100.80 79.16 63.07 46.82 34.16

Depreciation 15.35 12.13 8.86 8.24 6.40

Other Written Off 0.00 0.00 0.00 0.10 0.13

Profit Before Tax 85.45 67.03 54.21 38.48 27.63

PBT (Post Extra-ord Items) 85.45 67.03 54.21 38.48 27.63

Tax 15.14 13.33 11.44 5.31 5.31

Reported Net Profit 70.32 53.71 42.77 33.18 22.33

Net P/L After Minority Interest & Share Of

Associates70.32 53.71 42.81 33.18 22.33

Total Value Addition 44.33 37.42 34.44 31.33 26.07

Equity Dividend 3.80 1.58 0.00 1.90 1.58

Corporate Dividend Tax 0.65 0.27 0.00 0.32 0.27

Earning Per Share (Rs) 6.66 50.87 40.52 31.43 21.15

Book Value (Rs) 25.74 186.53 180.23 141.30 111.99

Dividend and Bonus History

Index Price Comparison

Company Forecast

PBIT – 10.77 v/s 10.21

ROCE – 13.4 v/s 12.3

Net Profit Margin – 5.29 v/s 4.98

Return on net worth – 26.43 v/s 27.94

Reserves – 250.64cr v/s 186.36cr

PAT – 70.32cr v/s 53.71cr

Total assets – 1077.69cr v/s 895.57cr

Net sales – 1324.79cr v/s 1073.52cr

Tax Paid – 15.14cr v/s 13.33cr

Days BSE NSE

30 53.19 53.18

50 57.95 57.90

150 61.19 61.21

200 57.15 57.15

Simple Moving AverageImportant Ratios

Recommendations

Buy Sharon Bio-Medicine Ltd. at current or lower market

levels

Reasons for the recommendations are :

License approval from USFDA and awaiting approval from UKMHRA will have a

substantial impact on revenue and profit of the company.

Growth in agriculture industry will have a huge positive impact on the demand of

SBML products.

No need for capital expenditure in short or medium term.

Big correction in the stock without even after the sales of the company being

normal.