JAGSONPAL PHARMACEUTICALS LTD.

JAGSONPAL PHARMACEUTICALS LTD: (BSE: 507789 NSE: JAGSNPHARM

M/s Jasgsonpal Pharma belongs to the Jagmohansingh Kochar Group. The company has got various bulk drug formulations and various other kind of drugs with an excellent sales network spread all over the country as well as various other countries. Besides, the company has also got excellent R&D facility with ultra modern factory at Delhi.

Starting from a chemist shop in Delhi 40 years back, the company has come long place and has created a niche place for itself in the pharma world.

The company has a share capital of Rs. 13.10 Crores made up of 2.62 Crore shares of Rs.5.00 each. Out the above, the promoters, Kochar group hold about 66 percent. About 5 percent shares are held by high networth individuals/bodies. The remaining about 30 percent is held with the public.

The company issued bonus shares and split its face value from Rs.10.00 to Rs.5.00 during the year 2004. Even now it is commanding a good book value. The price to book value ratio is also quite favourable for prospective investors. The company is profit making and dividend paying.

The company made a net profit of 4.96 crores for FY 06 but the profit took a dip to Rs.2.78 Crores for FY 2006-07. However, for the 1st two quarters ending June 2007 and September 2007 the company has tremendously increased its performance. The profits for June 2007 were 0.75 Crores and for Sept. 1.71 Crores, thus the half year profit for FY 08 has already touched Rs.2.46 crores. The remaining two quarters are expected to increase the bottom line (on a conservative basis) by 3.0 crores, thus taking the total profit to about 5.5 crores which will be almost double the FY 2006-07 profit.

Thus the eps expected for the full year ending March 2008 is expected to be 2.10. On a conservative estimate, our expectations of future growth in EPS is :

FY 2008-09 PROFIT : 8.00 CRORES EPS 3.05
FY 2009-10 PROFIT : 12.00 CRORES EPS 4.61
FY 2010-11 PROFIT : 15.00 CRORES EPS 5.76

Even if the share trades at 20 times the present earnings, the share should see a level of 42 by April 2008, about 60 by April 2009 and 85 by April 2010. Please take into account the fact that the eps is calculated on shares of FV Rs.5.00.

Pharma Sector was somewhat neglected during whole of 2007. Analysts are expecting a rerating of this sector during 2008. Fundamentally also, Jagson Pharma is worth looking at.

Conservative investors can safely accumulate Jagsonpal shares, which are currently ruling at around 33 with a clear holding of 2 years.

Kindly note :

a) We advise only regarding fundamentally strong and performing companies. The companies may be mostly profit making and in a few cases, they may be turn around companies.
b) Please go through our fundamental analysis carefully, verify the facts and figures (if you need to) and only then invest.
c) We expect investors to have a time horizon of at least one year and more.
d) We do not advise for short term investing, which is risky.
e) Despite all these, we do not take any responsibility for your financial matters. Investment is solely your decision.


(AJAY SINGH RATHORE)
KASHIWALA