TOWA - Performance Will Outcast New ‘Mid Term Plan’
In Towa’s MTP announcement, it has projected single digit revenue growth and assumed there will not be any ‘New Major Reform’ by Govt to enhance generic uptake in next 3 years. While our take is 1) there would be few major reforms in April-12 like further increase in dispensing fee and incentives to doctors will boost Towa’s revenue (as 90%+ its revenue from these two segments), 2) Towa management is taking the right decision by investing in Capex to produce complex formulations & API and for creating a larger bank of dossiers. 3) Towa is building a strong balance sheet and short term sacrifice in Gross and Operating profit is the natural side effect. 4) Towa’s management has been conservative unlike its peers and exceeded its own MTP every year.
COMPANIES MENTIONED
TOWA
TOWA
