Bliss GVS Pharma gets a 'side effect'

Bliss GVS Pharma, Mumbai based female contraceptive maker, is down close to 13% at Rs. 33.30, after the company denied its management being in talks with Pfizer to sell a unit or stake in the company. Company has categorically denied running a sale mandate based on the rumours floating on social media. Shares of this small pharma company had peaked at Rs. 41.30 in Monday’s closing trade. Thus, share price has corrected by over 20% in 2 days.

Engaged in manufacturing female contraceptives, soft pessaries and suppositories, the company has a US FDA approved manufacturing facility at Palghar, 90 km from Mumbai, and exports its products to over 60 countries worldwide, which accounts for 95% of its sales. It has healthy net margins, which stood at 14.5% for FY13, having reported consolidated sales of Rs. 397 crore and PAT of Rs. 57.7 crore for FY13. During Q1FY14, standalone sales and PAT was Rs. 76 crore and Rs. 18.3 crore respectively, translating into net margins of 24%.

Current market cap of the company is Rs. 350 crore, with promoter holding of 64.95%. Of this, its Managing Director SN Kamath holds 49.46% stake in the company. Given the unique product, export oriented sales and concentrated promoter holding, the company can be a good takeover target for larger domestic and MNC pharma majors.