Marksans Pharma to double its manufacturing capacity – here’s why? Check analyst view, management’s commentary, share price history and more

Marksans Pharma share price: With an aim to increase the formulation business amid improved demand, Small-cap pharma company Marksans Pharma Limited on Tuesday entered into a business transfer agreement with Goa-based Tevapharm India Private Limited.

Marksans Pharma in a filing to exchanges said the company will acquire Teva Pharma’s business relating to the manufacture and supply of bulk pharmaceutical formulations in Plot No. Al, Phase l-A, Verna Industrial Estate, Verna, Goa, India, as a going concern on a slump sale basis.

Teva Pharmaceutical Industries is a global leader in generic and specialty medicines with a portfolio consisting of over 3,500 products in nearly every therapeutic area. It has significant innovative research and operations supporting their growing portfolio of specialty and biopharma products.

Deal’s Internals

According to the release, “Marksans has agreed to retain the Teva Pharma's site employees with existing terms of employment. The transaction is in cash consideration and is expected to be finalized by April 1, 2023, subject to the usual closing conditions.”

The company in a different filing on Wednesday said that the completion of this acquisition would take around 2 years, with an investment of Rs 200 crore.

What Management Says

The acquisition has the potential to significantly expand our manufacturing capability and accelerate our core growth strategy, Mark Saldanha, Promoter and MD of Marksans said. “It will supplement our innovative product portfolio, as we plan to begin manufacturing of creams, ointments, etc. in India.”

Saldanha also said that the acquisition is also a testament to the company’s commitment to invest in product innovation, expand capacities, and drive market share gains. “We are confident that this acquisition will lead to a transformational growth journey unlocking further value for shareholders."

New Formulations

Through the acquisition, Marksans plans to double the existing Indian capacity from 8bn units per annum currently and plans to manufacture tablets, hard and soft gel capsules, ointments, gummies, and creams, from the new capacity.

The new capacity will be an addition to the three existing manufacturing sites in Southport (UK), Farmingdale (US), and Goa (India).

About Marksans Pharma

Headquartered in Mumbai, Marksans Pharma is engaged in the Research, Manufacturing & Marketing of generic pharmaceutical formulations in the global markets. It has a robust product portfolio spread over major therapeutic segments of CVS, CNS, Antidiabetic, and Pain Management, among others.

Technical Analysis

In today's session, we witnessed a huge spike in the price of Marksans Pharma following the news of acquiring Teva Pharma's manufacturing unit, Mehul Kothari AVP - Technical research, Anand Rathi Shares & Stock Brokers said in his comment on the share price of the company.

“Although the spike helped the stock to make a high near Rs 55 mark, however, settling near 48 levels. At this juncture; it is trading below its 200 day moving average. Also, the trend is weak on higher degree charts, Kothari further said while analysing the chart of Marksans stock.

“Thus, for the time being we do not expect any fireworks from the stock. The stock might remain in the range of 55-40 for some more time. Only a convincing move above Rs 55 would confirm a bottom in the stock and that might make it lucrative for investment.”

Owned by Ace Investor

Ace investor Mukul Agrawal has 50,00,000 equity shares or 1.22 per cent stakes in Marksans Pharma as per the June shareholding pattern of the company available on the BSE. Agrawal publicly holds 53 stocks with a net worth of over Rs 2,349.5 crore as of October 12, 2022, as per trendline.com.

Share Price History

On Wednesday, the stock gained almost 12 per cent intraday to touch a day’s high of Rs 54.6 per share and eventually closed over 4 per cent higher to Rs 48 on the NSE. It has touched a 52-week high of Rs 71.7 on October 11, 2021, and a 52-week low of Rs 38.6 on June 20, 2022.

The share price in the last one year has declined over 30 per cent and over 15 per cent in the last six months, however, in the last 10 years the stock has given returns of over 1700 per cent on the NSE.