Thread by @drprashantmish6

High risk investment idea Morepen labs
1- High risk because corporate governance problem , payment default etc ( enter at your own risk it’s not my recommendation .
2-Ideal buying range 12-15

3-Sales from 2014 to 19 increased from 367 Cr to 769 Cr in 2019 and loss of 3 Cr in 2014 to profit of 29 Cr in 2019

4- financial parameters presently not attractive at but going forward I hope improvement will be there (with growing business, zero debt , backward integration.

5- API -major molecules are montelukast and loratadine , atorvastatin , rosuvastatin - all are high volume API , montelukast is very commonly used now a days and growing market , same with rosuvastatin and atorvastatin ( major producer of montelukast and loratadine in India )

Other API include gliptin range of anti diabetics , and other anti diabetics .

6-company in FY 19-20 added three new API Rivaroxaban ( blood thinner with global market 51000 Cr ) Vidagliptin ( anti diabetic with global market 9000 Cr ) UDCA ( used for treatment of primary biliary Cirrhosis ( global market 1400 Cr ) all three are growing molecule .

7-vidagliptin patent expired in dec 2019 ( Zomelis by Novartis ) Rivaroxaban Indian patent expired in Dec 2019, UDCA patent free worldwide.

8-It’s one of the product Dapagliflozin ( anti diabetic) last week got approval from FDA for treatment of heart failure ( first anti diabetic drug to got approval in heart failure ) ( many companies already manufacturing it )

9-Home diagnostic and formulations business- BP instrument , thermometer ( including infrared) , glucometer, and many other products but I am optimistic on growth of glucometer

because of increasing diabetic population and once a person buy a glucometer then glucometer strips sell is constant revenue generator and strip of that particular company is required in that glucometer.

10-it’s OTC segment contains brand like lemonate and burnol . Although both not showing any growth but it’s ORS ( oral rehydration solution) and Pain X brand is growing, they recently launched so many products in OTC and home diagnostic and home care segment.

11- company was having debt of 750 Cr and after CDR and debt Payment now company is debt free .

12- Company is dependent on China for raw material and now company is investing in backward integration and aim is to reduce China dependency by 50% in next 3-4 yrs and will improvise OPM .

13 -Recently it’s Baddi device manufacturing unit got ISO -13485 certification from British standards institution , UK

14- There are many more verticals like branded formulations and probiotic segment but I am optimistic on API segment and Diagnostic segment and governments push for API and make in India device may boost its growth prospects provided no corporate governance issue in future.

Please add something if you know ( I know promoters ban by sebi , recent payment default ) any thing other then this please provide your input .

@threadreaderapp unroll

#Morepen labs concall updates ( I am omitting covid related impact )
1- API business constitute 56% of company turnover.and company is hopeful of 22-23% growth in coming years and formulation segment is de growing .
2- finished dose in branding segment grown at 19%

3- Montelukast api growth 36% for 9 months and last q degrown - overall growth 18%
4- Atrovastatin growth 163% in 9 months and 93% as a whole .
5- new molecules growth is 119%

6- Launched Covid care essentials in its OTC segment- Sanitizer, Hand wash ( same like Dettol hand wash ) medicated soap , Dr Morepen CHYAVANPRASH , vitamin C candies , Haldi capsules , N95 mask , powder free gloves and face shields

7-Launched infrared thermometer, and increased production of pulse oxymeter.
8- 30 products are in pipe line and company filed up the proposal and Company is hopeful of clearing all those proposal by 30 sept ( API related proposal)

9- Company claims that it is the only company in India which manufacture glucometer in India , and largest manufacturer of digital bp monitor in India and company is working to reduce dependency on China and Korea for raw material.

10- Company started getting orders of DEXAMETHASONE and HCQ and manufacturing will start in July / Aug
11- 60-70% intermediates in API are coming from China ( its a matter of concern)

12- Loratadine company is no 1, in montelukast it is no 1 , in atorvastatin it’s no 1 or 2 , heading towards no 1 in rosuvastatin, Glucometer it is no 1 , in bp Moniotr it is no 1 or 2
13- Company is adding new category in API segment- Neuropsychiatry

Although most of the people thinks that it is a penny stock but I am sure with current growth and products line in next 5 yrs it may not be labelled as penny stock looking at last few years growth, all its facilities are US FDA approved .

but currently it looks costly and although I am invested from 10 -11 rs average price I feel correction to 15 rs level may be a good entery point again but for keeping such stock in demat account require patience for years for very good returns.

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