Arvind Remedies Ltd [ARL] a potential multibagger

Company Story: Arvind Remedies Ltd is a Chennai based pharmaceutical company in India. It is manufacturing and marketing world-class allopathic and ayurvedic pharmaceutical products within and outside India. Looking at the need of drugs with less side effects and better efficacy, ARL is engaged in development of dosage forms with unique USP. As a result side effect of existing formulation is reducing and bioavailability of drug or end point therapeutic effect is increasing. Currently ARL has products in the late clinical stage in different therapeutic segments like Neuro de-generation disorder, Arthritis, Cardiac, Depression and Viral Diseases.

Having grown notably in terms of production capacity, product categories, market share, advancements in R & D, market reach and global acceptance, it’s today a significant force to reckon with in the Indian Pharmaceutical Industry.

ARL is in four Business Segments for faster growth and profits. They are

1.Ethical: The Ethical market is continuing its journey from strength to strength in its strategy of capturing the market share. ARL     has expanded its territory in the Northern India During the year ARL has launched few products viz. ARVICEP 100 Antibiotec, ARGNDIA – infertility, ARVINEX – control of heavy menstrual bleeding.

2.Institution: The Company has been able to cover almost all the States making its presence in all parts of the country, by supplying to Central Govt. departments like Railways, Defence, ESI Hospitals, and all the State Government Hospitals through-out the country.

3.Contract: Apart from ARL's own manufacturing activities, it is concentrating on utilizing its spare capacity for manufacturing products of other reputed companies, under leave & licence manufacturing and third party agreements.

4.International market: The year 2012-13 was significant for ARL in so far as it registered a substantial growth and made its presence felt in the African countries like Zambia, Kenya, Malawi, Ivory coast, Togo and Senegal and Central American countries.

ARL’s full-fledged plant at Irrungatukottai, spreading over 2.4 lac sq. ft has the facility to manufacture oral solid dosage forms, oral liquid dosage forms, topical preparations, liquid parenterals and hard & soft gelatin preparations. ARL is actively involved in Brand Marketing and Generics sales. By developing the off patented products through R & D and by registration of products in ANDAs, ARLis hopeful to enhance its exports rapidly in the coming years.

Multibagger Potential:

1.R & D pipeline has a number of Herbal products, in the development stage, and a new Herbal Product is expected to be launched every 9 to 12 months.

2.Promoters are holding 36.40 %( as on SHP of Sep 2014) and history of SHP indicates promoters are adding slowly.

3.Market cap of just 313.40Crs[As on November 07, 2014] for a company of making sales of 911Crs and profit of 58.90Crs [Y-o-Y 2013]


My view: This stock is not popular because of high debt and pledging of shares by promotors.