DISHMAN PHARMACEUTICALS & CHEMICALS LTD

KARTIK SHARMA
ROLL NO 196
DELTA
SWOT Analysis

This SWOT Analysis of Dishman Pharmaceuticals Chemicals Ltd. provides a

strategic SWOT analysis of the company's businesses and operations. This free
SWOT analysis shows strengths, weaknesses, opportunities and threats. This
SWOT analysis of Dishman Pharmaceuticals Chemicals Ltd. can provide a
competitive advantage.

Strengths

-experienced business units

-monetary assistance provided
-existing distribution and sales networks

Weaknesses

-high loan rates are possible

-future debt rating
-tax structure
-small business units
-competitive market
-cost structure

Opportunities

-income level is at a constant increase

-new acquisitions
-growth rates and profitability
-growing economy
-global markets

Threats

-external business risks

-government regulations
-financial capacity
-rising cost of raw materials
-increase in labor costs
-growing competition and lower profitability

TARGETING NICHE SEGMENTS

While the Indian CRAMS business caters to novel molecules of customers that are
in the advanced stage of the development process, Dishman’s Switzerland
subsidiary Carbogen Amcis AG caters to the early stage chemical process and
development requirements of innovators. It also has capabilities to supply high-
potency molecules targeting niche therapies such as oncology and steroids.

Carbogen Amcis recently commenced operations at its high-potency unit at Bavla

(Gujarat) . Select global pharma majors have completed safety studies, and
supplies are likely to commence over the next few quarters.
The Bavla facility is expected to garner revenues of $4-8 million this fiscal, which
will increase to $25-30 million over the next two years. Given the robust margins
in this segment, higher contribution from the Hi-Po facility will lift Dishman’s
overall margins.

Dishman acquired Solvay’s cholestrol and Vitamin D3 business in the Netherlands

in 2007. The company recently commenced operation at the cholesterol facility in
the Netherlands which will further aid Dishman’s margins from the second half of
the fiscal. Also, the recent increase in cholesterol and vitamin D3 prices may also
aid margin improvement over the next few quarters.

Operations at its active pharmaceutical ingredient (API) facility at the Shanghai

Chemical Industry Park, China, which was a drain on the cash until some time ago,
resumed recently.

The facility is expected to attain cash break-even soon, which may help operating
margin improvement. Dishman has also made public its intention to sell off the
facility.

The company also plans to exit the Pharma and Finechemicals SEZ situated in
Gangad and Kalyangadh village (Gujarat) and the proceeds are expected to be used
to retire debt. Also, the proceeds from the Chinese asset sale, as and when it
happens, are likely to be used to repay its borrowings.

The gross debt (including current maturity of long term loans) currently stands
at Rs. 982 crore, translating into a debt-equity ratio of 0.88 times.
Dishman has been in an investment phase for the last five years. Its net assets have
doubled in the last six years. With the company unlikely to undertake any large
scale capex for the next two years, improvement in utilisation levels will lift
profits.

Dishman Pharma's Shareholding Pattern

Description Percent of Share (%)

Promoters 61.36

Individuals 11.57

Institutions 6.40

FII 3.29

Govt. 0.00

Others 17.38

Promoters
Individuals
Institutions
FII
Others
Pestel Analysis