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MOSL: Morning India (20/March/18): 1. Shilpa Medicare; 2. Logistics; 3. Metals Weekly

MOrning India (20/March/18): 1. Shilpa Medicare; 2. Logistics; 3. Metals Weekly

 

Today’s top research idea

Shilpa Medicare: EIR lowers regulatory risk over medium term

• The receipt of establishment inspection report (EIR), with unchanged status – voluntary action initiated (VAI) – for the Jadcherla formulations facility from the USFDA is a positive.
• The USFDA had inspected this facility over 20-30 November 2017. It had issued a form 483, with 10 observations. SLPA has only one formulation and resolution of the issues in the 483 was critical for its existing business and for future ANDA approvals. The issuance of EIR and status remaining unchanged at VAI implies that the inspection is closed successfully and will not be a show stopper for SLPA’s future approvals.
• Currently, SLPA has 31 ANDAs pending for approvals. On overall basis, we expect 16% CAGR in sales to INR12b and 35% CAGR in PAT to INR2.7b over FY17-20.
• We re-iterate Buy with price target of INR749.

Piping hot news

Sebi may tell exchanges to raise fees for trading in illiquid stocks

• The Securities and Exchange Board of India (Sebi) has asked stock exchanges to raise transaction fees for trading in illiquid stocks in their recent discussions, two people aware of the matter said. The regulator feels some of these may be shell companies that could expose small investors to high risks, the people said on condition of anonymity.