Hold Marksans Pharma, target Rs 31: Centrum Broking

Centrum Broking has a hold call on Marksans Pharma Ltd. with a target price of Rs 31.0 . The current market price of Marksans Pharma Ltd. is Rs 31.95 Time period given by the brokerage is a year when Marksans Pharma Ltd. price can reach defined target.

Marksans Pharma Ltd., incorporated in 1992, is a smallcap company with a market cap of Rs 1285.25 crore.



Investment rationale by Centrum
We downgrade Marksans Pharma (MPL) to Hold from Buy rating with a TP of Rs31 (earlier Rs55) based on 18x March’20E EPS of Rs1.7. MPL’s Q4FY18 results were lower than our expectations. The drug maker’s Q4FY18 revenue grew 8% YoY, EBIDTA margin declined by 200bps to 2.1% and net profit declined to Rs(65)mn YoY from Rs(33)mn. The Goa facility was approved by UK MHRA and TGA-Australia. We expect MPL’s performance to improve led by the recent launch of four new products in the US and expected approvals for softgel capsules from US FDA. Key positive trigger to our assumption includes stupendous growth in the US market and key negative risk includes regulatory issues for the Goa facility from US FDA.