Horizon Direct Access Dermatologists: A Promising Investment Opportunity?

As investors, we are always on the lookout for companies that demonstrate consistent growth, strong financials, and a solid presence in their respective markets. One such company that caught my attention is Ajanta Pharma, a leading player in the dermatological sector with a brand portfolio that includes Melacare, one of the top brands in Dermatology.

Recently, I had the opportunity to take a closer look at Ajanta Pharma's financials and was impressed by their performance. The company has been reducing its debt burden over the past few quarters, with debt-to-equity ratio down to 0.93 in Q2. This is a significant achievement, especially considering that promoters have pledged shares, which had peaked at 25% from 14%. Moreover, the tax rate for FY10 was around 15-16%, indicating that Ajanta Pharma has been able to maintain its competitiveness.

What's more impressive is the company's sales growth, which stood at a remarkable 18% in 1HFY11. PAT (Profit After Tax) grew by an equally impressive 58%. The acquisition of formulations facilities in FY10 has enabled the company to cater to global markets, and the setup of a state-of-the-art API facility in Waluj Aurangabad in the same year has further strengthened its position.

Ajanta Pharma's financials are also noteworthy. Net Profit Margin (NPM) has consistently increased from 5% in FY06 to 7.5% in FY10, while Raw Material/Sales ratio has come down significantly from 56% of Sales in FY06 to 36% of Sales in FY10.

The company's long-term growth prospects are equally impressive, with a 5-year sales CAGR (Compounded Annual Growth Rate) of 17% and EPS CAGR of 29%. Moreover, its long-term sales CAGR stands at an impressive 23%, while PAT CAGR is even higher at 47%.

Given Ajanta Pharma's robust financials, attractive valuation, and promising growth prospects, I would give the stock a grade of 9 on a scale of 1 to 10. The company's current CMP (Current Market Price) of around 192 is available at a PE ratio of approximately 5-6.

In conclusion, Horizon Direct Access Dermatologists like Ajanta Pharma are an attractive investment opportunity for those looking for consistent growth and strong financials. With its impressive track record, robust balance sheet, and promising future prospects, Ajanta Pharma is definitely worth considering for investors with a 2-3 year horizon.

As recommended by Hitesh Patel, one of the top stock pickers in the industry, Ajanta Pharma features in his current top 5 picks, making it an even more compelling investment opportunity.

Horizon direct access dermatologists