SUVEN LIFE SCIENCE Equity Report

Disclaimer: Suven Life science Analysis and recommendation is purely for knowledge purpose and not to consider as any financial advice. Data are collected from various sources and analysed.For testing accuracy paper trading can be done.

Market Cap: 2400     Crore 52W High: 227    52W Low:149

About the Company:

Suven Life Sciences was promoted by Mrs. and Mr. Venkat Jasti in 1989, as a Private Limited Company. Later it was converted into a Public Limited Company in January 1995. Suven Life Science is a biopharmaceutical company focused on discovering, developing and commercializing novel pharmaceutical products, which are first in class or best in class therapies through the use of GPCR targets. The Company has six internally–discovered therapeutic drug candidates currently, in pre–clinical stage of development targeting conditions such as ADHD, dementia, depression, Huntington's disease. Parkinson's disease and obesity are in addition to developmental candidate SUVN–502 for Alzheimer's disease and Schizophrenia.

The company’s main thrust is in Contract Research and Manufacturing Services (C–R–A–M–S). Suven's ‘C–R–A–M–S’ is in existence since 1991 serving as many as 22 global Life Science and Fine Chemical Companies by developing and supplying cost effective Pharmaceutical and Agrochemical  Intermediates for New Chemical Entities  (NCE's) meeting world standards of Quality, Speed and Respect for Environment.

Drug Discovery & Development Support Services (DDDSS) aims to provide Contract Drug Discovery & Development services in Medicinal chemistry.

Source: NDTV

Shareholding Pattern

Performance Analysis

The company had a good first quarter accompanied by two bad quarters. The Sales were considerably low and last quarter is expected to perform better to keep up the sales. Good model of management and expert support for the company is advantage and the major sources of revenue have not got dried up. The Promoter Jasti has been continuously buying shares and it is good news for the company. EBITDA sound good but increased expenditure and other finance cost are eating up major share of the profit. The P/E ratio of the company is 36.00 which very close to industry ratio. Beta of stock is 0.90.

YOY the company has been consistent and management has good control over the operations held. The company is expected to post mixed results in the coming quarter but fundamental view is strong and stock is expected to move up. The figures as per the previous annual reports are giving good numbers and expectation for the investors.

Providing Quality service on timely basis is the major advantage of Suven. The CRAMS model is delivering good operations and the services are up to the quality. The Company is having more than 100 active projects and the clients are also pretty happy with the quality of the performance delivered. The R&D Department is outsourced in order to concentrate more on core competencies. In other way the outsourcing has created more expenditure too.

SUVN 502 is in the phase of approval from USFDA and it will be a boost fro the company if approved. Along with that three other are awaiting trials and results. Decline in Long Term borrowings and increase in assets is a good sing for the company. So the key factors are supporting the stock and a better Q4 performance is expected.

Technical Analysis

From technical front increased delivery trading during past trading days are giving positive sign for the stock. Immediate resistance is seen at 195 levels and support is seen at 175 levels. The RSI of the stock is neutral. So some fluctuations and a test of 170 levels can be expected. Even though, the strong support at 160 levels is hard to break.

House View

Suven Life Sciences is expected to break the 195 level soon and reach upto 220 levels in coming quarter. As I said S1-175 and S2-160 are strong support zones and better results can make sure stock won’t go further beyond that level. Considering the operations and financials, Suven is fundamentally a good stock and expected to reach above 200.