AMBALAL SARABHAI ENTERPRISES LTD.

BSE Code: 500009,

Face Value: Rs.10

CMP: Rs.14.05

EPS: Rs.7.55

Target: Rs.22--25

Time Frame: 3 months time frame.

The company's principal activity is the manufacture and marketing of pharmaceutical products and bulk drugs. Its products are injectables, liquid, ointments, powders, tablets and capsules, vaccine and serum of penicillin, tetracycline or derivatives and Vitamin C and it derivatives. It operates in two segments: Pharmaceuticals and Electronics. The plants are located at Vadodara and Ahmedabad.

The promoter holding has increased from 26.12% in September, 2008 to 30.43% in September, 2009 quarter. Or on a Y-o-Y basis the promoters' holding has increased, which is a good sign. Now if you see, its peer group, then we would get surprised to find the names Cipla Ltd and Sun Pharma Ltd.

Some of the triggers are mentioned below:
* The Bulk Drugs plant of Synbiotics Limited, a wholly owned subsidiary of the company at Luna has already commenced production activities.
* The Company has acquired manufacturing and marketing Company i.e. Suvik Hitek Pvt. Ltd. The Ethical Division has re-launched the products of Suvik and Sarabhai Chemicals in market as planned with new team of field force who has promoted products to the selected doctors in India.

* The Oncology Division is also strengthened by adding new products and team of field force. During the year under review, Oncology Division has launched two new products viz. Fludagem & Xtinib.

* For the year 2009-10, Electronics Division of the Company has lined up high end products for marketing from reputed manufacturers and has also owned new products like Turbidity meter, Hb meter, Vis- Doublebeam Spectra, etc.

* Telerad Division would try to get the maximum possible orders for Spares/other Peripherals keeping Dollar business and system sales improving.

* During FY09, the Company has promoted a Company viz. Vovantis Laboratories Pvt. Ltd., a pharmaceutical specialists with a vision to establish a state of the art manufacturing facility specializing in Novel Effervescent drug delivery system. In a short span of time, this company is having presence in the US, Europe and Asian markets with its own offices in the respective places.

* Asence Inc., a wholly-owned subsidiary of the Company, incorporated in the US specializes in the supply of quality pharmaceutical preparations (Finished Dosage Forms and Active Pharmaceutical Ingredients) to international markets. Asence Inc., through the company, pursues a multi-layered growth strategy combining internal product development, strategic alliances and collaboration with cGMP manufacturing partners, acquisitions of products and leverage of infrastructure in India and the US.

* The Company is under massive restructuring process of its business to strengthen and improve its over all financial condition. In order to reduce cost, the Company has announced VRS Scheme and many employees have opted for the said Scheme including accounts officials and staffs.

Now if you go through the June, 2009 quarter results we will find that they were good as to compared to the same quarter previous year.

I remember a couple of years back, the stock raced from Rs.12 to around 32--33 hitting continuous upper circuits....this could be repeated this time also.

The stock has consolidated in a range for a long time before starting to move up.....Hence it should be prudent to accumulate the scrip around the CMP of Rs.14.05. The stock yesterday moved up with good volumes.