NSE Code: FDC BSE Code: 531599 ISIN INE258B01022 Market Cap (Rs. Cr) 2,700
FDC is well known for its product ‘Electral’. Formerly known as FairDeal Corporation, FDC is a manufacturer of pharmaceuticals, foods and bulk drugs. The therapeutic segment consists of products such as anti-infectives, dermatologicals, respiratory aids, antidiabetic formulations, antioxidants and haematinics. But FDC is best known for its oral re-hydration salts (ORS) sold under the brand name ‘Electral’, being a leader in this segment its market share has improved from 1.24% to 1.32% and its market rank has improved from 25th to 22nd. FDC’s plants are located in Roha, Waluj and Sinnar (Maharashtra), Verna (Goa) and Baddi (Himachal Pradesh). Some of leading brands in the company’s stable are Electral, Zifi, Pyrimon, Zoxan Zocon and Mycoderm. FDC exports its products to USA, UK, Brazil and a few other emerging markets. The Company’s subsidiaries include FDC International Limited and FDC Inc. Its joint venture entity includes Fair Deal Corporation Pharmaceuticals SA (Pty) Ltd.
Leadership position in ORS segment
The brand “Electral” is to ORS (oral rehydration solution). “Electral” caters to acute diarrhoea and dehydration, and is a lifesaving requirement. This product segment is a steady source of revenue for FDC. Domestic portfolio also contains brands such as Pyrimon (Ophthalmic), Zifi (anti-infective), Mycoderm (antifungal) and Victofol (Vitamin).
Robust Cash Reserves
Cash flow from operations was Rs. 700 cr over last 7 years with capex at ~ Rs. 250 cr. As per September 2013 the company has cash and cash equivalent of around Rs 500 cr which is a very huge amount considering the balance sheet of the company and recent buyback of Rs. 46.5 cr. Such a huge amount of reserves could be use for further expansion or could be used for inorganic growth. Such future plans could unlock huge potential in the company.
Domestic market growth to be stable for FDC
The Indian Pharmaceutical industry in FY13 stood at Rs. 70,000cr - more than DOUBLE than in FY07. This industry is estimated to expand at 15% CAGR up to 2020 driven by lifestyle diseases such as cardiovasular, diabetics and Oncology, as it has been the case in the past. FDC has grown its domestic revenues by 50% over FY07- FY13 while the market has doubled due to lack of strong brands in these fast growing segments. The company is expected to continue steady grow along with the industry.
Greenassets.in assigns this investment a risk rating of 3 - MODERATE RISK. Loss of capital is possible with equity ownership. Detailed analysis and monitoring is key to managing risks successfully.
With a focus on healthcare innovation, including energy efficiency and waste management, FDC Limited is a consistent performer in the pharmaceutical sector. FDC Limited's professional management has be setting an example consistently for the industry through efficient operations both domestically and throughtout its global operational network. It deserves an E-Score of 8/10.
Being an international low cost producer of bulk drugs, providing essential medical formulations to millions of people across the Americas', Africa, Europe & Asia, the Social Impact of this investment is maximum, deserving a score of 10/10.
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