WHY MOREPEN LAB NOT MOVING

MORE PENS STATE -OF -ART MANUFACTURING FACILITY
Baddi COMPRISES A SCIENTIFICALLY INTEGRATED COMPLEX OF 10
PLANTS , EACH WITH A SPECIFIC PRODUCT PROFILE .
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THE COMPANY’S EXTENSIVE
R&D FACILITIES AND FACTORIES ARE MANNED BY A DEDICATED TEAM OF
PROFESSIONALS WHO ENSURE STRINGENT QUALITY STANDARDS .
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TODAY MOREPEN IS
EXPORTING PRODUCTS TO SEVERAL COUNTRIES ROUND THE GLOBAL .

THE FIRST MOREPEN MANUFACTURING PLANT WAS SET UP ON THE FOOTHILLS OF
THE HIMALAYAS IN THE IDYLLIC SURROUNDINGS OF THE PARWANOO .
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THE LARGE AND
SPREAD OUT FACILITY IS USFDA APPROVED FOR MANUFACTURE OF LORATADINE ,
AN ANTI-ALLERGY DRUG – INTERNATIONALLY KNOWN AS CLARITIN
(COMPANY SITE)
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MOREPEN HAS BEEN HANDLING COMPLEX CHEMICAL MANUFACTURING PROCESSES
SINCE LONG.
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GREATER EMPHASIS PLACED ON ADVANCED DRUGS AND INTERMEDIATES
LIKE ANTI-HYPERTENSIVE,ANTI-DIABETIC
API REVENUES FOR THE CURRENT YEAR HAVE REGISTERED A GROWTH OF 28%
WITH INCREASED COVERAGE OF EXPORT MARKETS .
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API BUSINESS MAKES UP OVER 63% OF OVERALL  BUSINESS OF THE COMPANY
AGAINST 60% IN THE LAST YEAR.
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COMPANY HAS LAUNCHED A NEW BUSINESS UNDER THE NAME “GROOMING”
IN 2016 AND CURRENT YEAR SALES OF IT 2.74 CR AND COMPANY EXPECTS
BETTER PERFORMANCE FROM THIS.

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FINANICIAL PERFORMANCE

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SALES IN 2011 :216 CR
SALES IN 2016:452 CR
SALES GROWTH:109%
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NET PROFIT IN 2011 WAS( -42.98 CR) BUT IN 2016 ITS 15.78 CR.
COMPANY WAS MAKING LOSS DUE TO HEAVY R&D EXPENDITURE AND OTHERS EXPENSES WHICH KEPT
REDUCING YEAR BY YEAR AND IN 2015 IT BECOMES LOSS TO PROFIT.
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SINCE THE MAIN COST WHICH PHARMA COMPANY FACES ARE R&D EXPENDITURE IF AFTER SUCH EXPENDITURE MARKET DIDN’T TAKE ITS PRODUCTS POSITIVELY THEN ANY COMPANY FINANCIAL DESTROY.
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IN 2016 IT WAS TRADING AT PE OF 75 AND NOW CURRENTLY TRADING PE OF
41.72 MEANS SOME IMPROVEMENT IN EARNING.
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COMPANY HAS NEVER PAID DIVIDEND DUE .
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IN LAST 3 QUARTERS THERE IS NO IMPROVEMENT IN QUARTERLY EBIDTA LEVEL
THAT’S WHY MARKET IS NOT READY TO GIVE PRICE RISE.
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RIGHT NOW COMPANY IS NOT MAKING TOO MUCH EXPENSE ON R&D AND GIVING FOCUS TO CUT COST AND OTHER EXPENSES.
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COMPANY IS REDUCING DEBT EACH YEAR WHICH IS A GOOD SIGN .
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COMPANY HAS MADE INVESTMENT ON DEBTOR TO INCREASE TOP LINE.
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COMPANY EMPLOYEE COST IS INCREASING EACH YEAR AND RIGHT NOW 10% OF TOTAL SALES.
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THE STATUTORY AUDITOR HAS COMMENTED  ABOUT DELAY IN DUE PAYMENT TO LENDERS,
TDS,VAT,ESI ETC.
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COMPANY HAS NOT REDEEMED PREFERENTIAL SHARES WHICH WAS MENTIONED BY
SECRETARIAL AUDITORS IN HIS REPORT
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COMPANY IS PLANNING TO CONVERT PREFERENTIAL SHAREHOLERS INTO EQUITY
SHARES IF IT HAPPENS THIS WILL INCREASE BURDEN ON COMPANY TO IMPROVE
EPS RESULTING SHARE PRICE.
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COMPANY IS NOT ASSURED REGARDING ITS US  GROWTH DUE TO DECLINING
DEMAND IN SMALL MOLECULES
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THE SEGMENT IN WHICH COMPANY IS OPERATING IS HIGHLY COMPETITIVE AND
LARGE PLAYERS GIVE NO ROOM TO SUSTAIN.
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API BUSINESS IS HIGHLY EXPORT ORIENTED AND EXCHANGE RATE FLUCTUATIONS
CAN IMPACT DRASTICALLY ITS REVENUE.
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CONCLUSION-
COMPANY IS TRYING TO REDUCE COST PLUS DEBT BUT CONVERSION OF PREFERENTIAL SHAREHOLDERS INTO EQUITY INCREASES EQUITY RESULTING DECREASING EPS.
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EXCEPT THIS AS PER HISTORICAL DATA IF COMPANY FAILED TO CUT R&D AND OTHERS COST THEN IT ONCE AGAIN BECOME LOSS MAKING.
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SO FRESH INVESTMENT NOT SUGGESTED.
THERE MAY BE CHANCES OF ERRORS WHICH CANT BE DENIED.
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THIS IS MY PERSONAL VIEW NO INVESTMENT IDEA WHICH MAY BE INCORRECT.

Author: Atul Singh Stock Market Analyst

Disclaimer: This Blog, its owner, creator / contributor is not a research analyst and expressing opinion only as an individual investor in Indian equities. He/She is not responsible for any loss arising out of any information, post or opinion appearing on this blog. Investors are advised to consult financial consultant before acting on any such information. All information in this blog is posted for personal study, All information posted on blog is as available in public domain.

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