BEXIMCO PHARMACEUTICALS LIMITED

DSE: BXPHARMA
BLOOMBERG: BXPHAR:BD

Company Overview

Company Fundamentals

Beximco Pharmaceuticals Limited was incorporated as a public

limited company in Bangladesh in 1976. It commenced its
manufacturing operation in 1980. The company is engaged in
manufacturing and marketing of generic pharmaceuticals
formulation products including life-saving intravenous fluids
and Active Pharmaceuticals Ingredients (APIs).

Market Cap (BDT mn)

The company currently produces about 300 generics in more

than 500 strengths and dosage forms. The company also
produces a number of APIs. It utilized 80.58% and 78.96% of its
production capacity at tablet & capsule segment and liquid &
cream segment respectively. The firm earned 94% of its
revenue from local sales and the rest from export. Napa, Napa
Extra, Tofeen, Azithrocin, Neoceptin R, Antacid MAX etc.
are some blockbusters of the Company.
Beximco is among the top three pharmaceutical firms in the
country holding 9.0% market share within industry. It received
GMP accreditation from AGES, Austria (for European Union);
and win National Export Trophy (Gold) for the fourth time.
The firm was listed in the DSE & the CSE in 1986 & 1995
respectively and also in the Alternative Investment Market
(AIM) of the London Stock Exchange in 2005 through issuance
of Global Depository Receipts (GDRs). Presently, 13.15% shares
of the company are held by its director/ sponsors, 15.21% by
the institutional investors, 25.29% by the foreign investors and
46.35% by the general public.

29,702.2
1.0%

Market weight

86.9%

Free-float

386.2

Paid-up Capital (BDT mn)

3,862.4

No. of Shares (in mn)

3-month Average Turnover (BDT mn)

121.5

3-month Return

16.2%
76.9

Current Price (BDT)

43.6 - 76.9

52-week price range (BDT)

19.5

Sector Forward P/E

2012

2013

2014

2015
(9M Ann.)

Financial Information (BDT mn):

Sales

9,289

10,491

11,207

12,847

Operating Profit

2,208

2,324

2,418

2,747

Profit After Tax

Assets

1,319

1,405

1,528

1,906

24,590

27,471

29,001

30,434

3,117

3,313

3,373

3,517

18,408

19,776

20,920

21,953

0/15

10/5

10/5

n/a

Gross Profit

47.3%

46.1%

45.5%

45.0%

Operating Profit

23.8%

22.2%

21.6%

21.4%

Pretax Profit

Pharmaceutical Industry in Bangladesh, currently valued at USD

1.5 billion, is primarily produces generics drugs of around 8,000
different brands which can furnish up to 98% of the domestic
demand. At present, there are 260 registered pharmaceutical
manufacturers in Bangladesh out of which 191 are operational.
Yet, top three firms held 37.5% of total market share Square
Pharma (19.0%), Incepta (9.5%) and Beximco Pharma (9.0%).

20.6%

20.0%

18.8%

17.3%

Net Profit

14.2%

13.4%

13.6%

14.8%

Sales

17.7%

12.9%

6.8%

14.6%

Gross Profit

15.9%

10.2%

5.5%

13.3%

Operating Profit

11.0%

5.3%

4.0%

13.6%

Net Profit

10.1%

6.5%

8.8%

24.7%

In 2014, this industry earned 11.37% year-on-year growth.

However, this rate has increased compared to 8.12% growth
accomplished in year 2013 due to increased medical coverage
of the population and easy access to health care services. At
present, pharmaceuticals products are exported to 87
Countries.

Profitability:

ROA

5.5%

5.4%

5.4%

6.4%

ROE

7.4%

7.4%

7.5%

8.9%

14.9%
19.9%
3.4

17.0%
23.7%
3.7

16.3%
22.6%
3.3

16.5%
22.9%
3.6
15.6

Industry Overview

Export is a promising but untapped segment for the Countrys

pharmaceutical sector. According to DGDA Bangladesh exports
drugs to 87 countries. In FY 2014-15, the Country exported USD
72.64 million pharmaceutical products which were 4.91%
higher than that of FY 2013-14. According to Export Promotion
Bureau the Export target for FY 2015-16 is USD 80 million. So
far up to August of 2015-16, export earnings from
pharmaceuticals product was USD 12.88 million exceeding
same period of the previous years performance by 1.18%.
WTO member courtiers have extended the deadline to comply
with the TRIPS agreement, allowing LDCs to avoid applying and
enforcing IP rights on pharmaceutical products until 2033.
Bangladesh will get more benefit from the extension of drug
patent waiver as the country is more capable of manufacturing
pharmaceutical products than any other LDCs.

Long Term Debt

Equity
Dividend (C/B)%
Margin:

Growth:

Leverage:

Debt Ratio
Debt-Equity
Int. Coverage
Valuation*:

22.5

21.1

19.4

Price/BV

1.6

1.5

1.4

1.4

EPS (BDT)

3.4

3.6

4.0

4.94

47.7

51.2

54.2

56.8

Price/Earnings

NAVPS (BDT)

*Based on Current Market Price and Number of Shares Outstanding.

Investment Positives

Beximco Pharma received US FDA approval for

manufacturing Carvedilol, a popular blood pressure drug.
The Company expects to commence export of Carvedilol
in the first half of 2016. The full year export revenue from
this product is projected to be USD 3 to 4 million initially.

November 26, 2015

On June 2015 the Company received final approval of US

Food and Drug Administration (US FDA) to export
pharmaceutical products into their market. This is a very
prestigious credential for any pharmaceutical company;
at the same time, it unlocks huge export opportunity.
BXPHARMA is the first Bangladeshi pharmaceutical
company which started to export medicine in Australia
since January 2015. During January to June of 2015, the
Company has entered into 5 new countries and completed
21 registrations for 19 products across 10 markets.
BXPHARMA has been investing BDT 10 billion over the
period of 2014-17 to expand its production capacity. These
expansion plans include establishing new manufacturing
facilities for producing cephalosporin and insulin, which
will start production, as per the Management expectation,
by 2017. Additionally, BXPHARMA will upgrade its existing
production facilities.
The firm showed its continual effort to increase sales by
penetrating new market niche. In 2014, it launched 28
new products, including 3 new products in local market. It
also registered 55 new products in overseas markets
during the same period.
Beximco Pharma is a leading manufacturer and exporter of
medicines in Bangladesh and its facilities are already
accredited by the regulatory authorities of the
European Union, Australia, Canada, Taiwan and Brazil,
among others.
The firm is less dependent on debt capital. At the same
time it has adequate capacity for existing debt servicing.
The firm has paid stable dividend over last three years.
This trend may continue in near future.

Investment Negatives

The firm imports significant parts of its raw and packing

materials; therefore unfavorable foreign exchange
movement may significantly affect the profitability of the
company.
Total BDT 464.0 mn contingent liabilities (Income Tax BDT
149.03 mn; VAT BDT 144.11 mn, Custom Duty BDT 22.51
mn and BDT 148.35 mn for third party corporate
guarantee) claim against the firm may badly affect its
future profitability.

Last Five Year's Price Movement (BDT)

200
150
100
50
0
21-11-2010

21-11-2011

21-11-2012

21-11-2013

21-11-2014

21-11-2015

Source: DSE & ILSL Research

5 Year Earnings Per Share (Restated) (in BDT)

EPS

5.0
4.2
3.4

3.10

3.42

4.94

Growth

30%

3.96

3.64

25%
20%

2.6

15%

1.8

10%

1.0

5%

0.2
-0.6

2011

2012

2013

2014

2015 (9M An.)

0%

Source: Annual Report & ILSL Research

Pricing Based on Relative Valuation:

Multiple

Value (BDT)

Peer Forward P/E

20.2

99.8

Peer Trailing P/E

24.0

94.9

Market Forward P/E

15.1

74.5

Market Trailing P/E

15.4

60.9

Note: SQURPHARMA, RENATA and ORIONPHARM have been considered as peer

group for the valuation purpose.

Concluding Remark

Beximco Pharmaceuticals Ltd. showed stable performance over

the years. In its latest nine monthly financial results, the
Company demonstrated 16.5% YoY growth in revenue and
23.9% YoY growth in its profit after tax that that of the previous
year.