maverick
19-11-2007, 08:11 PM
Span Diagnostics- Bringing Health To Life
BSE 524727; CMP Rs 77
Speciality testing kits and clinical reagent manufacturer Span has had many a suitor in the past that included Abbott Labs of the US with a whispered take-over price of Rs 250 per share. With Span a niche player in the growing field of pathological diagnosis, it may invite more MNC bidders soon that wish to capture the deplorably short on health but vast Indian market for testing instruments and equipments.
The Rs 55 crore Surat based Span Diagnostics Ltd. is a pioneer and trend setter of high quality products for pathology & clinical laboratories in the Indian diagnostics industry. A globally acknowledged and fastest growing diagnostic company with a successful track record of over 3 decades having one of the largest state-of-the- art ISO-9001:2000, WHO cGMP accredited advanced manufacturing facilities in Asia, with ISO 13485 & CE accredited products.
The corporate activity spans across India and 68 countries worldwide. SPAN services end users and distributors with ready to use testing kits and customized OEM products. More importantly, the corporate has been growing its top-line at a sustainable pace of 15 to 20 per cent per annum, with a consistent ramp-up in profitability.
The Financials
For the FY2007, Span Diagnostics reported Revenues of Rs 55 crore and after tax profits of Rs 2.1 crore, which on an Equity of Rs 3 crore work out to Rs 7 per share. The corporate paid a dividend of 18 per cent for FY07. In the first half to September 2007 Revenues have reached 32 crore with after tax profits of Rs 2.4 crore or a non-annualised EPS of Rs 8 per share.
Given the present trend of growth and operations, Span should be be able to conclude FY08 with Revenues in excess of Rs 65 to Rs 70 crore with conservative profits after tax of Rs 4 crore or an EPS of 13. A very conservative PE of 10 should give the stock a PO of Rs 130 by March-April 2008.
More importantly, the market cap of the corporate is a mere Rs 23 crore, and given the specialized nature of Span's business it should jump to atleast Rs 100 crore or 1.3 times its FY08 sales. This should result in a tripling of the stock price over a period of time.
The ownership in the company is concenterated with the Desai family owning 52 per cent of the Equity directly and another 10 shareholders holding another 26 per cent. This concenterated ownership makes Span an ideal take-over target. A while back Abbott Labs Inc., US was believed to have made a bid for the company with an offer price of Rs 250 per share. There will be more such MNC suitors in the future as investors wake up to the true potential of a special clinical diagnostics test and reagent manufacturer in a market of 1 bn people with deplorable health standards.
So what is Span Diagnostics all about?
Span Diagnostics was conceived more than three decades ago by a pathologist, Dr.Pradip K. Desai as a start-up entity in 1972. The goal was to indigenously develop and manufacture a comprehensive range of ready-made diagnostic reagents needed by clinical pathology laboratories. The company went public in 1994,to bring in more resources and expand further.
Today Span operates through strategic marketing divisions,ensuring focused approach to specific customer segments. SPAN has nurtured its growth by consistently adding new products through R & D endeavors.The products are manufactured at its state-of-the- art plants in India and France,observing WHO-cGMP norms.
SPAN also takes pride in having exclusive strategic business alliances with the leading diagnostic companies from world over,to market their products in India. These include US Corporations Remel Inc., Hitachi Chemical Diagnostics, BBI Biomedica, General Biometric, Awareness Technology, and the Japanese Nihon Kohden and Gillmedicus of Korea.
The Surat based manufacturing facility approved by WHO has three divisions:
Span PDP (Popular Diagnostic Products Division)
Popular Diagnostic Products division focuses on clinical and pathological laboratories, blood banks and hospitals in the areas of infectious disease serology, rheumatology & areas of hematology. Parameters covered are HIV, Hepatitis-B, Hepatitis-C, Malaria, Syphillis, Typhoid, Tuberculosis, Filaria, Rheumatology & Blood grouping and typing antisera.
Span iD (Instrument Division)
Instrument division focuses on clinical pathology laboratories, hospitals, physicians, and research institutes. In the areas of laboratory automation, system for biochemistry, hematology, ELISA & allergy testing. Parameters covered are semi & Fully automated biochemistry analysers, hematology analysers, ELISA readers, ELISA washers, & Immunoassay Analyser analyser(for allergy testing
Cogent (Clinical Chemistry Products Division)
Clinical Chemistry Division caters to clinical laboratories & hospitals in the areas of Biochemistry, Stains & Indicators and readymade analytical reagents. Parameters covered are Renal Profile, Cardiac Profile, Metabolic Profile, Liver Profile, Lipid Profile, Electrolytes, Bacteriology Stains, Haematology Stains, Controls & Standards.
BSE 524727; CMP Rs 77
Speciality testing kits and clinical reagent manufacturer Span has had many a suitor in the past that included Abbott Labs of the US with a whispered take-over price of Rs 250 per share. With Span a niche player in the growing field of pathological diagnosis, it may invite more MNC bidders soon that wish to capture the deplorably short on health but vast Indian market for testing instruments and equipments.
The Rs 55 crore Surat based Span Diagnostics Ltd. is a pioneer and trend setter of high quality products for pathology & clinical laboratories in the Indian diagnostics industry. A globally acknowledged and fastest growing diagnostic company with a successful track record of over 3 decades having one of the largest state-of-the- art ISO-9001:2000, WHO cGMP accredited advanced manufacturing facilities in Asia, with ISO 13485 & CE accredited products.
The corporate activity spans across India and 68 countries worldwide. SPAN services end users and distributors with ready to use testing kits and customized OEM products. More importantly, the corporate has been growing its top-line at a sustainable pace of 15 to 20 per cent per annum, with a consistent ramp-up in profitability.
The Financials
For the FY2007, Span Diagnostics reported Revenues of Rs 55 crore and after tax profits of Rs 2.1 crore, which on an Equity of Rs 3 crore work out to Rs 7 per share. The corporate paid a dividend of 18 per cent for FY07. In the first half to September 2007 Revenues have reached 32 crore with after tax profits of Rs 2.4 crore or a non-annualised EPS of Rs 8 per share.
Given the present trend of growth and operations, Span should be be able to conclude FY08 with Revenues in excess of Rs 65 to Rs 70 crore with conservative profits after tax of Rs 4 crore or an EPS of 13. A very conservative PE of 10 should give the stock a PO of Rs 130 by March-April 2008.
More importantly, the market cap of the corporate is a mere Rs 23 crore, and given the specialized nature of Span's business it should jump to atleast Rs 100 crore or 1.3 times its FY08 sales. This should result in a tripling of the stock price over a period of time.
The ownership in the company is concenterated with the Desai family owning 52 per cent of the Equity directly and another 10 shareholders holding another 26 per cent. This concenterated ownership makes Span an ideal take-over target. A while back Abbott Labs Inc., US was believed to have made a bid for the company with an offer price of Rs 250 per share. There will be more such MNC suitors in the future as investors wake up to the true potential of a special clinical diagnostics test and reagent manufacturer in a market of 1 bn people with deplorable health standards.
So what is Span Diagnostics all about?
Span Diagnostics was conceived more than three decades ago by a pathologist, Dr.Pradip K. Desai as a start-up entity in 1972. The goal was to indigenously develop and manufacture a comprehensive range of ready-made diagnostic reagents needed by clinical pathology laboratories. The company went public in 1994,to bring in more resources and expand further.
Today Span operates through strategic marketing divisions,ensuring focused approach to specific customer segments. SPAN has nurtured its growth by consistently adding new products through R & D endeavors.The products are manufactured at its state-of-the- art plants in India and France,observing WHO-cGMP norms.
SPAN also takes pride in having exclusive strategic business alliances with the leading diagnostic companies from world over,to market their products in India. These include US Corporations Remel Inc., Hitachi Chemical Diagnostics, BBI Biomedica, General Biometric, Awareness Technology, and the Japanese Nihon Kohden and Gillmedicus of Korea.
The Surat based manufacturing facility approved by WHO has three divisions:
Span PDP (Popular Diagnostic Products Division)
Popular Diagnostic Products division focuses on clinical and pathological laboratories, blood banks and hospitals in the areas of infectious disease serology, rheumatology & areas of hematology. Parameters covered are HIV, Hepatitis-B, Hepatitis-C, Malaria, Syphillis, Typhoid, Tuberculosis, Filaria, Rheumatology & Blood grouping and typing antisera.
Span iD (Instrument Division)
Instrument division focuses on clinical pathology laboratories, hospitals, physicians, and research institutes. In the areas of laboratory automation, system for biochemistry, hematology, ELISA & allergy testing. Parameters covered are semi & Fully automated biochemistry analysers, hematology analysers, ELISA readers, ELISA washers, & Immunoassay Analyser analyser(for allergy testing
Cogent (Clinical Chemistry Products Division)
Clinical Chemistry Division caters to clinical laboratories & hospitals in the areas of Biochemistry, Stains & Indicators and readymade analytical reagents. Parameters covered are Renal Profile, Cardiac Profile, Metabolic Profile, Liver Profile, Lipid Profile, Electrolytes, Bacteriology Stains, Haematology Stains, Controls & Standards.