Parabolic Drugs Ltd - NSE...in Chandigarh. They have one subsidiary company namely Parabolic Research Labs Ltd. The Company produces the SSP and Cephalosporin range of antibiotics

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1 | P A G E

PARABOLIC DRUGS LTD www.parabolicdrugs.com

SECTOR: PHARMACEUTICALS REPORTING DATE: 1ST JUNE, 2016

Parabolic Drugs Ltd 1st June, 2016 TABLE 1 - MARKET DATA (STANDALONE) (As on 31st May, 2016)

NSE Code - PARABDRUGS NSE Market Price (₹) 4.40 NSE Market Cap. (₹ Cr.) 26.92

Sector – Pharmaceuticals Face Value (₹) 10.00 Equity (₹ Cr.) 61.89

52-week High/Low (₹) 11.15/4.20 Net worth (₹ Cr.) -222.07

Business Group - Indian Private TTM P/E N.A. Traded Volume (Shares) 12,326

Year of Incorporation - 1996 TTM P/BV N.A. Traded Volume (lacs) 0.54

Source - Capitaline

Corporate Office: COMPANY BACKGROUND

SCO 99-100, Top Floor, Parabolic Drugs Ltd is one of the fast growing API (Active Pharmaceutical Ingredients) and

API intermediate manufacturing and marketing Company. The Company is in SME segment,

with increasing international presence and a strong R&D foundation. The Company is based

in Chandigarh. They have one subsidiary company namely Parabolic Research Labs Ltd. The

Company produces the SSP and Cephalosporin range of antibiotics in oral and sterile form,

along with their intermediates. They supply APIs to a number of domestic and international

companies. The Company has two manufacturing facilities at Derabassi, Punjab, and

Panchkula, Haryana. They have an established R&D setup which comprises chemical and

analytical research laboratories at their facility at Sundhran, Derabassi. Parabolic Drugs Ltd

was incorporated in the year 1996.

Sector 17-B,

Chandigarh – 160 017

Company Website:

www.parabolicdrugs.com

TABLE 2 - PRICE PERFORMANCE

31st May,

2016

29th May,

2015

30th May,

2014

% Change CAGR for 2

years 2016 vs 2015 2015 vs 2014

Price (₹) 4.25 8.70 7.35 -51.15% 18.37% -23.96%

Trading Volume (Shares) (yearly avg.) 80,889 79,790 35,595 1.38% 124.16% -

NSE Market Cap. (in ₹ Cr.) 26.30 53.84 45.49 -51.15% 18.36% -23.96%

Source - Money Control

http://www.parabolicdrugs.com/




2 | P A G E



TABLE 3 - FINANCIALS

(₹ Cr.) 2015 2014 2013 % Change CAGR for

2 years 2015 vs 2014 2014 vs 2013

Net Worth -222.07 284.30 288.65 -178.11% -1.51% N.A.

Current Assets 450.89 565.62 601.72 -20.28% -6.00% -13.44%

Non-Current Assets 499.25 556.00 594.09 -10.21% -6.41% -8.33%

Total Assets 950.14 1,121.61 1,195.81 -15.29% -6.20% -10.86%

Investments 36.02 46.15 81.93 -21.95% -43.67% -33.69%

Finance Cost 98.69 83.07 69.78 18.80% 19.05% 18.92%

Long Term Liabilities 591.21 305.12 381.26 93.76% -19.97% 24.53%

Current Liabilities 555.00 506.19 513.62 9.64% -1.45% 3.95%

Turnover 231.78 437.92 765.68 -47.07% -42.81% -44.98%

Profit After Tax (PAT, ₹ Cr.) -379.32 -4.35 -139.76 N.A. N.A. N.A.

EPS (₹) -61.00 -1.00 -23.00 N.A. N.A. N.A.

Source - Money Control/Annual Report

Discussion as per Company:

During the FY 2014-15:

Sales and Export: During the year Company has registered a turnover (gross) of ₹239.93 crores as compared to ₹446.71 crores

in the previous year showing thereby a decrease of 46%. The Export turnover of manufactured API products has also been

lower at ₹111.50 crores as compared to ₹203.80 crores in the previous year. Total exports including trading of products have

been at ₹114.30 crores as compared to ₹ 209.80 crores in previous year. There was overall decrease in domestic sales and

exports due to paucity of non-availability of required working capital funds from the banks.

During the FY 2013-14:

1) Sales and Export: During the year under review, the Company has registered a turnover (gross) of ₹446.71 crores as

compared to ₹828.00 crores in the previous year showing thereby a decrease of 46%. The Export turnover of manufactured API

products has been higher at ₹150.00 crores as compared to ₹115.40 crores in the previous year showing thereby, an increase

of 30%. Total export including trading of pharma products had been even higher at ₹203.70 crores. There was overall increase

in quality of exports as exported value to the regulated markets were much higher in the current financial year leading to

improved value addition of exported products.

2) Profitability: The Company incurred loss before depreciation, interest and tax (EBDIT) of ₹(34.00) crores as compared to a

loss of ₹(108.40) crores in the previous year. However, if company include an exceptional write off of debit balances which

were made during the year, on advise of Auditors and other experts amounting to ₹84.00 crores, the EBIDT loss for the year

will stand increased to ₹(118.00) crores. The Company incurred loss before tax (PBT) of ₹(220.00) crores as compared to a loss

of ₹(195.00) crores in the previous year. After tax adjustment/write backs of ₹88.30 crores (previous year ₹55.30 crores), the

net loss worked out to ₹(131.70) crores as compared to a net loss of ₹(139.80) crores in the previous year owing to the high

interest burden, write off of debit balances, revaluation of semi-finished stock because of the quality and eroded market

prices.




3 | P A G E



AUDIT QUALIFICATIONS

Audit Qualifications in last 3 years: The Auditors have not raised any qualification in last three years.

However, Auditors have drawn attention on Emphasis of Matter as mentioned below:

(a) The Company has defaulted in repayment of dues to a financial institution and banks as all the credit facilities from most of

banks/financial institution of the Company have been classified as NPA during year. During the FY 2012-13 the Company has

made application for restructuring of debts under CDR mechanism which has been approved and stands implemented, the cut-

off date being 30th September, 2012. As per CDR package, the instalment for various term loans were to start from October,

2014. However, Company has not been able to fulfil obligation towards repayment of installment & interest.

(b) There are no dues of sales tax, value added tax, wealth tax, service tax and cess which have not been deposited with the

appropriate authorities on account of any dispute. However according to information and explanations given to Auditors the

following cases of Income Tax, Excise duty & Service Tax are pending at various courts as their demand will be confirmed after

order except as referred to in Annexure- 'A'(vii)(b) of Independent Auditor's Report as on 31st March, 2015.

(C) The accumulated losses of the Company have exceeded its net worth. The Company has incurred cash loss during the year

covered by the audit and also in the immediately preceding financial year. However, the accounting continues to the prepared

on going concern basis.

Response Comment

Frequency of Qualifications The Auditors have not raised any qualification

in last three years.

Have the Auditors made any adverse remark in last 3 years? No -

Are the material accounts audited by the Principal Auditors? Yes -

Do the financial statements include material unaudited financial statements? No -

TABLE 4: BOARD PROFILE (As on 31st March, 2015)

Regulatory Norms Company

% of Independent Directors on the Board 50% 60%

% of Promoter Directors on the Board - 40%

Number of Women Directors on the Board At least 1 1

Classification of Chairman of the Board - Executive Promoter Director

Is the post of Chairman and MD/CEO held by the same person? - Yes

Average attendance of Directors in the Board meetings (%) - 82%

Source - Money Control/Annual Report

Composition of Board: As per Regulation 17(i)(b) of the Listing Regulations, 2015, the Company should have at least 50%

Independent Directors as the Chairman of the Board is a Promoter/Executive Director. The Company has 60 % of Independent

Directors and hence, it meets the regulatory requirements.

Board Diversity: The Company has 5 directors out of which 4 are male and 1 is female. The Company is compliant as per

Clause 17 of the Listing Regulations, 2015 regarding the requirement of at least one-woman director.

Holding of position of MD/ CEO & Chairman by same person: The Company has appointed Mr. Pranav Gupta as the Chairman

and Managing Director of the Company. Appointment of a single person as the Chairman and Managing Director of the

Company is not a good governance practice as this may lead to concentration of power in a single person.


http://www.sebi.gov.in/cms/sebi_data/attachdocs/1441284401427.pdf



4 | P A G E



TABLE 5 - FINANCIAL RATIOS

Ratios 2015 2014 2013 % Change

2015 vs 2014 2014 vs 2013

Turn

ove

r

Rat

ios

Inventory Turnover 0.73 1.19 2.18 -38.31% -45.37%

Debtors Turnover 2.36 2.94 5.52 -19.58% -46.80%

Fixed asset Turnover 0.46 0.79 1.29 -41.06% -38.89%

Current Asset Turnover 0.51 0.77 1.27 -33.61% -39.16%

Ret

urn

Rat

ios Operating Profit Margin -107.43% -50.24% -25.47% N.A. N.A.

Net Profit Margin -163.66% -0.99% -18.25% N.A. N.A.

Return on Assets (ROA) -39.92% -0.39% -11.69% N.A. N.A.

Return on Equity (ROE) N.A. -1.53% -48.42% N.A. N.A.

Return on Capital Employed (ROCE) N.A. N.A. N.A. N.A. N.A.

Liq

uid

ity

Rat

ios

Current Ratio 0.81 1.12 1.17 -27.29% -4.62%

Quick Ratio 0.24 0.39 0.49 -37.59% -19.82%

Cash Ratio 0.07 0.10 0.22 -30.35% -55.57%

Working Capital Turnover ratio N.A. 7.37 8.69 N.A. -15.22%

Solv

ency

Rat

ios Debt to equity ratio N.A. 2.96 2.69 N.A. 9.97%

Interest Coverage Ratio N.A. N.A. N.A. N.A. N.A.

Trad

ing

Rat

ios

Market Cap / Sales 0.13 0.07 0.04 88.94% 74.84%

Market Cap/ Net Worth N.A. 0.11 0.11 N.A. 1.53%

Market Cap/PAT N.A. N.A. N.A. N.A. N.A.

Market Cap/EBITDA N.A. N.A. N.A. N.A. N.A.

Trading Volume (shares) (avg. of 1 year) 83,259 77,222 32,491 7.82% 137.67%

Trading Volume (shares) (high in 1 year) 11,09,102 4,92,924 3,95,640 125.00% 24.59%

Trading Volume (shares) (low in 1 year) 4,182 5,638 690 -25.82% 717.10%

Ratio - High/low trading volume 265.21 87.43 573.39 203.34% -84.75%

Ratio - High/average trading volume 13.32 6.38 12.18 108.69% -47.58%

Source - Money Control




5 | P A G E



TABLE 6 (A): OWNERSHIP & MANAGEMENT RISKS

Mar' 2016 Mar' 2015 Mar' 2014 Comments

Shar

eho

ldin

g

Promoter shareholding 38.64% 38.64% 38.31% The promoter shareholding in the Company

increased from 38.31% as on March’14 to

38.64% as on March’16 due to market

purchase of share. The shareholding of public

institution decreased from 15.95% to 15.77%

and that of public others increased from

45.74% to 45.58% during the same period.

The promoters have pledged 94.58% of their

shareholding and 36.55% of total

shareholding.

Public - Institutional

shareholding 15.77% 15.91% 15.95%

Public - Others shareholding 45.58% 45.45% 45.74%

Non Promoter Non Public

Shareholding - - -

TABLE 6 (B): OWNERSHIP & MANAGEMENT RISKS

Market Activity of Promoters

The Promoters of the Company bought shares from the secondary market. Total

number of shares purchased by promoter and promoter group during the three-year

period is 2,08,348.

Preferential issue to promoters No preferential issue of shares was made to the promoters in last three years

Preferential issue to others No preferential issue of shares was made to other shareholders in last three years

GDRs issued by the Company The Company did not issue any GDRs in last three years

Issue of ESOPs/Issue of shares other

than Preferential allotment The Company did not issue any shares to the employees under its ESOP Scheme

Source - Annual Report




6 | P A G E



Glossary

Equity: The equity shares capital of the Company

Net Worth: The amount by which the Assets exceeds the liabilities excluding shareholders’ funds of the Company

Turnover: The revenue earned from the operations of the Company

EPS: Earning Per Share is net profit earned by the Company per share

𝐸𝑃𝑆 =Profit After Tax

Number of outstanding shares

P/E ratio: It is the ratio of the Company’s share price to earnings per share of the Company

𝑃/𝐸 𝑟𝑎𝑡𝑖𝑜 =Price of each share

Earnings per share

Current Assets: Cash and other assets that are expected to be converted to cash in one year

Fixed Assets: assets which are purchased for long-term use and are not likely to be converted quickly into cash, such as land,

buildings, and equipment

Total Assets: Current Assets + Fixed Assets

Investments: An investment is an asset or item that is purchased with the hope that it will generate income or appreciate in the

future.

Finance Cost: The Financing Cost (FC), also known as the Cost of Finances (COF), is the cost and interest and other charges

incurred during the year in relation to borrowed money.

Long Term Liabilities: Long-term liabilities are liabilities with a maturity period of over one year.

Current Liabilities: A company's debts or obligations that are due within one year.

Inventory Turnover ratio: Inventory Turnover is a ratio showing how many times a company's inventory is sold and replaced over

a period.

𝐼𝑛𝑣𝑒𝑛𝑡𝑜𝑟𝑦 𝑇𝑢𝑟𝑛𝑜𝑣𝑒𝑟 𝑟𝑎𝑡𝑖𝑜 =Sales Turnover

Inventory

Debtors Turnover: Accounts receivable turnover is an efficiency ratio or activity ratio that measures how many times a business

can turn its accounts receivable into cash during a period

𝐷𝑒𝑏𝑡𝑜𝑟𝑠 𝑇𝑢𝑟𝑛𝑜𝑣𝑒𝑟 𝑟𝑎𝑡𝑖𝑜 =Sales Turnover

Accounts recievables

Fixed Asset Turnover: The fixed-asset turnover ratio is a financial ratio of net sales to fixed assets

𝐹𝑖𝑥𝑒𝑑 𝐴𝑠𝑠𝑒𝑡 𝑇𝑢𝑟𝑛𝑜𝑣𝑒𝑟 𝑟𝑎𝑡𝑖𝑜 =Sales Turnover

Fixed Assets

Current Asset Turnover: The current-asset turnover ratio is a financial ratio of net sales to fixed assets

𝐶𝑢𝑟𝑟𝑒𝑛𝑡 𝐴𝑠𝑠𝑒𝑡 𝑇𝑢𝑟𝑛𝑜𝑣𝑒𝑟 𝑟𝑎𝑡𝑖𝑜 =Sales Turnover

Current Assets




7 | P A G E



Operating Profit Margin: Operating margin is a measurement of what proportion of a Company’s revenue is left over after

paying for variable costs of production such as wages, raw materials etc. It can be calculated by dividing a Company’s operating

income (also known as “operating profit”) during a given period by its sales during the same period.

𝑂𝑝𝑒𝑟𝑎𝑡𝑖𝑛𝑔 𝑃𝑟𝑜𝑓𝑖𝑡 𝑀𝑎𝑟𝑔𝑖𝑛 =Operating profit

Sales Turnover

Net Profit Margin: Net profit margin is the percentage of revenue left after all expenses have been deducted from sales

𝑁𝑒𝑡 𝑃𝑟𝑜𝑓𝑖𝑡 𝑀𝑎𝑟𝑔𝑖𝑛 =Net profit

Sales Turnover

Return on Assets: ROA tells you what earnings were generated from invested capital (assets)

𝑅𝑒𝑡𝑢𝑟𝑛 𝑜𝑛 𝐴𝑠𝑠𝑒𝑡𝑠 =Net profit

Total Assets

Return on equity/net worth: return on equity (ROE) is the amount of net income returned as a percentage of shareholders’

equity.

𝑅𝑒𝑡𝑢𝑟𝑛 𝑜𝑛 𝐸𝑞𝑢𝑖𝑡𝑦 =Net profit

Net worth

Return on Capital Employed: Return on capital employed (ROCE) is a financial ratio that measures a company's profitability

and the efficiency with which its capital is employed.

𝑅𝑒𝑡𝑢𝑟𝑛 𝑜𝑛 𝐶𝑎𝑝𝑖𝑡𝑎𝑙 𝐸𝑚𝑝𝑙𝑜𝑦𝑒𝑑 =Net profit

Total Debt + Equity share capital

Current ratio: The current ratio is a financial ratio that measures whether or not a firm has enough resources to pay its debts

over the next 12 months. It compares a firm's current assets to its current liabilities.

𝐶𝑢𝑟𝑟𝑒𝑛𝑡 𝑟𝑎𝑡𝑖𝑜 =Current Assets

Current Liabilities

Quick ratio: The quick ratio is a measure of how well a Company can meet its short term financial liabilities.

𝑄𝑢𝑖𝑐𝑘 𝑟𝑎𝑡𝑖𝑜 =Current Assets − Inventories

Current Liabilities

Cash ratio: The ratio of the liquid assets of a Company to its current liabilities.

𝑄𝑢𝑖𝑐𝑘 𝑟𝑎𝑡𝑖𝑜 =Current Assets − Inventories − Account Recievables

Current Liabilities

Working Capital Turnover ratio: The working capital turnover ratio is also referred to as net sales to working capital. It indicates a

Company's effectiveness in using its working capital.

𝑊𝑜𝑟𝑘𝑖𝑛𝑔 𝐶𝑎𝑝𝑖𝑡𝑎𝑙 𝑇𝑢𝑟𝑛𝑜𝑣𝑒𝑟 𝑟𝑎𝑡𝑖𝑜 =𝑆𝑎𝑙𝑒𝑠 𝑇𝑢𝑟𝑛𝑜𝑣𝑒𝑟

Current Assets − Current Liabilities

Debt to Equity ratio: The debt-to-equity ratio (D/E) is a financial ratio indicating the relative proportion of

shareholders' equity and debt used to finance a company's assets.

𝐷𝑒𝑏𝑡 𝑡𝑜 𝐸𝑞𝑢𝑖𝑡𝑦 𝑟𝑎𝑡𝑖𝑜 =𝑆ℎ𝑜𝑟𝑡 𝑇𝑒𝑟𝑚 𝐷𝑒𝑏𝑡 + 𝐿𝑜𝑛𝑔 𝑇𝑒𝑟𝑚 𝐷𝑒𝑏𝑡

𝑁𝑒𝑡 𝑊𝑜𝑟𝑡ℎ

Interest Coverage ratio: The Interest coverage ratio is a debt ratio and profitability ratio used to determine how easily a

Company can pay interest on outstanding debt.

𝐼𝑛𝑡𝑒𝑟𝑒𝑠𝑡 𝐶𝑜𝑣𝑒𝑟𝑎𝑔𝑒 𝑅𝑎𝑡𝑖𝑜 =𝐸𝑎𝑟𝑛𝑖𝑛𝑔 𝐵𝑒𝑓𝑜𝑟𝑒 𝐼𝑛𝑡𝑒𝑟𝑒𝑠𝑡 𝑎𝑛𝑑 𝑇𝑎𝑥

𝐹𝑖𝑛𝑎𝑛𝑐𝑒 𝐶𝑜𝑠𝑡


http://www.investopedia.com/terms/i/invested-capital.asp

http://www.investopedia.com/articles/stocks/05/04405.asp



8 | P A G E



Market Cap/Sales ratio: Market Cap/sales ratio, Price–sales ratio, P/S ratio, or PSR, is a valuation metric for stocks. It is calculated

by dividing the company's market cap by the revenue in the most recent year; or, equivalently, divide the per-share stock price by

the per-share revenue.

𝑀𝑎𝑟𝑘𝑒𝑡 𝐶𝑎𝑝/𝑆𝑎𝑙𝑒𝑠 𝑟𝑎𝑡𝑖𝑜 =𝑀𝑎𝑟𝑘𝑒𝑡 𝐶𝑎𝑝

𝑆𝑎𝑙𝑒𝑠 𝑇𝑢𝑟𝑛𝑜𝑣𝑒𝑟

Market Cap/ Net Worth ratio: It is a valuation ratio calculated by dividing Company’s market cap to net worth.

𝑀𝑎𝑟𝑘𝑒𝑡 𝐶𝑎𝑝/𝑁𝑒𝑡𝑤𝑜𝑟𝑡ℎ 𝑟𝑎𝑡𝑖𝑜 =𝑀𝑎𝑟𝑘𝑒𝑡 𝐶𝑎𝑝

𝑁𝑒𝑡𝑤𝑜𝑟𝑡ℎ

Market Cap/ PAT ratio: It is a valuation ratio calculated by dividing Company’s market cap to net profit.

𝑀𝑎𝑟𝑘𝑒𝑡 𝐶𝑎𝑝/𝑃𝐴𝑇 𝑟𝑎𝑡𝑖𝑜 =𝑀𝑎𝑟𝑘𝑒𝑡 𝐶𝑎𝑝

𝑛𝑒𝑡 𝑝𝑟𝑜𝑓𝑖𝑡

Market Cap/ EBITDA ratio: It is a valuation ratio calculated by dividing Company’s market cap to EBITDA.

𝑀𝑎𝑟𝑘𝑒𝑡 𝐶𝑎𝑝/𝐸𝐵𝐼𝑇𝐷𝐴 𝑟𝑎𝑡𝑖𝑜 =𝑀𝑎𝑟𝑘𝑒𝑡 𝐶𝑎𝑝

𝐸𝐵𝐼𝑇𝐷𝐴

Trading Volume (shares) (avg. of 1 year): Average number of shares/day traded in 1 year

Trading volume (shares) (high in 1 year): Highest number of shares/day traded in 1 year

Trading volume (shares) (minimum in 1 year): Lowest number of shares traded on any one day in 1 year


https://en.wikipedia.org/wiki/Stock

https://en.wikipedia.org/wiki/Market_cap

https://en.wikipedia.org/wiki/Stock



9 | P A G E



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Contact Information

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Tel +91 22 4022 0322

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Research Analyst: Waheed Shaikh


mailto:[email protected]

mailto:[email protected]

http://www.sesgovernance.com/