Celestial lab fundamental research report by Sharetipsinfo.com

COMPANY OVERVIEW:
Celestial Lab has been supporting Pharma, Bio-Pharma and Biotech manufacturing with customized IT solution and contract research. Company is also involved in the R&D, commercial production and marketing of enzymes, nutraceuticals.
Company is setting up a biotechnology facility in Genome Valley at Hyderabad, India to manufacture its own drug molecules, industrial enzymes and to contract research activities.

Patent:
32 Herbal formulations in the different category is under process and filing with patent office.

New Development:
Company is in advance stage of clinical trials of new bio peptide molecules applicable for treatment of
Vitilogo
Psoriasis
Wound healing
Anti wrinkles
Wrinkles and skin aging
Skin tan

INDUSTRY OUTLOOK:
India is the hottest destination for conducting clinical research owing to the huge patient pool. The market is also getting boost from improved IPR protection with changed rules.
Clinical Trial outsourced market is expected to grow at a CAGR of 31%in 2010-12. The Clinical trial outsourcing market in India is expected to be $600 million by 2012.

INVESTMENT RATIONAL:
PAT in Q3FY10 has shown growth of 1482% growth. The growth in PAT is expected to continue further.
Company is into the sector which is expected to grow at CAGR of 31%.
Several patent are awaited which will push the top line and bottom line.
Stock is trading at 5X to trailing twelve month EPS of Rs 6.5, the industry average PE is 22X. The stocks look very cheap at current level.

	NO. OF SHARE	% OF TOTAL
PROMOTERS	4508178	40.27%
INSTITUTION	1431010	12.78%
GENERAL PUBLIC	5254812	46.95%
GRAND TOTAL	11194000	100.00%

	31/03/07	31/03/08	31/03/09
TOTAL INCOME	14.13	20.21	19.25
EXPENDITURE	-8.61	-10.49	-11.29
PBDITA	5.52	9.72	7.96
DEPRECIATION	-0.31	-0.26	-0.28
PBIT	5.21	9.46	7.68
INTEREST	0	-0.01	-0.06
PBT	5.21	9.45	7.62
TAX	-0.06	-0.05	-0.34
PAT	5.15	9.4	7.28

Key Highlights:
Total Income grew at CAGR of 16.7%.
PBDITA grew at CAGR of 20%.
PAT grew at CAGR of 18.8%.

	31/03/07	31/03/08	31/03/09
EPS	4.600679	8.39735573	6.503484
PBDITA MARGIN	39.06582	48.0950025	41.35065
NPM	36.44728	46.5116279	37.81818
INTEREST COVER		946	128

Key Highlights:
EPS grew at CAGR of 18.8% from Rs 4.6 in FY07 to Rs 6.5 in FY09.
PBDITA margin improved from 39.06% in FY07 to 41.35% in FY09. The rise is because of operational efficiency.
NPM improved from 36.4% in FY07 to 37.8% in FY09.
Interest cover remains high at 128. This show company is very less reliant on debt.

	Q3FY09	% CHANGE	Q3FY10
TOTAL INCOME	1.65	278.1818182	6.24
EXPENDITURE	-1.45		-4.41
PBDITA	0.2	815	1.83
DEPRECIATION	-0.04		-0.08
PBIT	0.16		1.75
INTEREST	0		-0.01
PBT	0.16		1.74
TAX	-0.05		0
PAT	0.11	1481.818182	1.74

Key Highlights:
Total Income grew by 278.2% to Rs 6.24 crore in Q3FY10 on YoY basis.
PBDITA grew by 815% to Rs 1.83 crore in Q3FY10 on YoY basis.
PAT grew by 1481% to Rs 1.74 crore in Q3FY10 on YoY basis.

VALUATION &OUTLOOK:
At cmp of Rs 33, it is trading at 5X to trailing twelve month EPS of Rs 6.5. The industry average PE is 22X. Even if we value the stock conservatively at half the industry PE at 11X, the fair price come at Rs 71.5. We expect sooner or later the price will catch up with the valuation.
The dividend yield on the counter at cmp is 1.55%.
The outlook remains strong as the sector is growing at CAGR of 31%. The company has been consistently showing the growth in top line and bottom line.

CONCLUSION:
Investors with 6-8 months investment horizon should take position on the counter.