RIL Company Analysis – RENATA
The pharmaceuticals sector as a whole has great potential ahead given the country’s population of 16 crores and the high economic growth. It is expected to have an annual growth rate of more than 12% during the next few years. Bangladesh’s per capita healthcare spending is nearer the bottom of the list among the Asian Countries and it is also expected to have double-digit growth in upcoming years. In the future, Bangladesh is now capable of producing world-class drugs and the government of Bangladesh has declared the drug industry as a “Thrust” sector. Various initiatives are being taken to increase the export of drugs. For example, liaising with the embassies of Bangladesh abroad and in collaboration with the Bangladesh, Pharmaceuticals Industries Association to organize Bangladesh Pharmaceuticals Fairs, Seminars in different countries to promote the products of Bangladesh.
Renata Limited (formerly Pfizer Limited) is one of the leading and fastest-growing pharmaceutical companies in Bangladesh. Renata Limited is the 4th largest pharmaceutical company in Bangladesh and the market leader in Animal health products holding a market share of 8.01%.
Revenue of Renata Limited accounts Tk. 2,925.09 million for the FY ’20-21, while it was Tk. 2,416.40 million in the previous year. As a result, the revenue has increased by 21% YoY. Profit after tax for the FY’ 20-21 amounting of Tk. 503.48 million while it was Tk. 412.95 million in the previous year; profit after tax has decreased by 21.92%. Renata Limited receives revenue for the supply of goods to external customers against orders received. The majority of contracts that Renata Limited enters into relating to sales orders contain single performance obligations for the delivery of pharmaceutical and animal health products.
The market price per share of Renata Limited is BDT 1,347 which implies the share price is undervalued compared to its average price of BDT 1897.93. There would be attractive long-term growth prospects for the Pharmaceutical industry in Bangladesh. So, the investors may get a potential return of 48% from investing this share at the current price level.
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