Venus Remedies (one of our stockletter picks) has posted satisfactory third quarter results, with both sales and profit trending upwards. We had recommended the stock on 18 May 2012 at Rs 161.10. The stock closed at Rs248.55 today, up by 54% in 9 months 

We had written about Venus Remedies, a research-based global pharmaceutical company, in our Moneylife issue dated 29 November 2012. The company has reported has reported 18% year-on-year (y-o-y) increase in net sales to Rs112.64 crore for the quarter ended December 2012 compared to Rs95.83 crore for the corresponding quarter last year. Its net profit rose 55.5% y-o-y to Rs16.06 crore against Rs10.33 crore it recorded for the same period last year.
 

A closer look at the Moneylife database reveals that the company has indeed been performing decently over the last few quarters. We looked at the net sales as well as operating profit pattern of Venus Remedies and found out that the company has not shown any negative growth in either, which shows consistency. The company’s three-quarter y-o-y growth rate is 16% whereas it has beaten the average this time around by growing at 18%. Likewise, its three-quarter y-o-y growth average for operating profit was 15% whereas it grew 26% for the December 2012 quarter. Yet, despite putting a string of good quarters, its valuation remains surprisingly low. It is quoting with market capitalisation at just over two times its operating profit, while its return on net worth is an impressive 20% for a company that is rarely tracked by analysts.
 

During the quarter, Venus Remedies received its first patent from Mexico for ‘Vancoplus’, a novel antibiotic formulation to combat Methicillin Resistant Staphylococcus Aureus ( MRSA ) infections. The patent has been granted from the Mexico Patent office and is valid till February 2026. Vancoplus has the potential to restrict transfer of bacterial resistance to other strains by preventing conjugation and transfer of plasmids containing resistant genes. Vancoplus is also the only known therapeutic option for breaking of bacterial biofilm formed by gram positive bacteria, one of the most common causes of bacterial resistance.
 

It also received approval from Drugs Controller General, India (DCGI) to conduct Phase-III clinical trials of its cancer detection new chemical entity (NCE). After thorough screening by the IND committee for the investigational NCE VRP1620, the DCGI has found clinical Phase-I and Phase II data satisfactory and thus granted permission to conduct Phase-III clinical trials on the molecule. The molecule is for early cancer detection.
 

It also launched CSE1034 under the brand name ‘Elores’. It is a novel Antibiotic Adjuvant Entity (AAE) to combat antimicrobial resistance caused by MDR, ESBL producing strains.
 

Venus Remedies closed at Rs248.55 on National Stock Exchange (NSE), down 0.22% from its previous close.
 

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