Dishman: A Healthy Multibagger

Dynamic Equities | June 19, 2017, midnight


Dishman pharmaceuticals and chemicals is a multinational company which was incorporated in 1983 and became a public company with effect from 1st April 1996. Dishman is engaged in manufacturing of active ingredients for the pharmaceutical industry.


Earnings Per Share (EPS) is considered the most important indicator of a company’s stock value and profitability.



We can see that the EPS is increasing over the subsequent years and the percentage change has also been tremendous, which is a very good sign. Even in the Quarter on Quarter (QoQ) result the EPS has increased from 0.52 (July 2016) to Rs.2.34 (September 2016) which is a percentage change of 361%.


Annual revenue helps in determining the health of the business.



We see that the annual revenue is increasing annually but the percentage change has remained quite flat from 2015 to 2016. Other than that we have seen a tremendous jump in the annual revenue over the past 4 years.


Latest news, new products & announcement of the company


July 2016 – Dishman Pharmaceuticals and Chemicals got the US Food and Drug Administration's clearance for its Naroda facility in Gujarat and its Neuland facilities in Switzerland.


Shareholding pattern of a stock is very important. A stock which has low supply and high demand creates an environment for the stock to go high. It is good if the company acquire its own stock.


In Dishman



It is also important to know the number of institutions holding a company’s stock. 776 institutions are holding the company’s stock.


Some of the Institutions are:



Thus, we can see that a good number of institutions are holding the shares of the company and the promoters are also holding a good percentage of shares. This is a very healthy sign for the company’s stock.


It is important to choose the leaders over laggards; this is decided by seeing the stock performance of the company. Dishman has also performed with its peers and the stock has given a return of 54.68%.



Technicals:


Dishman has support at Rs.196 which is its 3 month low. Upside target for this stock is at Rs.261.7 (2 week high). Dishman share price is currently trading at Rs.229 one can enter at buy position at Rs.220 – 224.


Key points from management


Management is focusing more on the CRAMS, disinfectant and vitamin D3 segments. They believe that the HiPo API, niche generic API and disinfectants will be the main future growth drivers. They have invested in new instruments to help in undertaking more complex research and projects.


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