Sequent Scientific stock good portfolio investment option

Sequent Scientific Ltd is a three decade old pharmaceutical company with a global footprint operating in the domain of animal health and speciality chemicals . It is the world’s largest active pharmaceutical ingredients (API) producer in the country. Being a pioneer in this industry, the company practically has a monopolistic business in the country. The company has eight manufacturing plants spread across India, Spain, Germany, Turkey and Brazil. Sequent Scientific has a presence in more than 100 countries with approvals from global regulatory agencies like the USFDA, WHO and TGA. The company’s  Vizag facility is India’s first and only USFDA approved facility for veterinary APIs. It focuses primarily on products for livestock and poultry and offers laboratory and technical support services. On the human health front, Sequent serves the female healthcare segment with an emphasis on steroids and hormones focusing on many therapeutic categories. It also operates across API therapeutic segments such as anti-malarial, anti-infective, central nervous system, anti-malarial, antibiotic, anti-hypertensive, muscle relaxant, anti-cancer and dermatology. A few years back the company acquired a niche veterinary health company in Germany and with this acquisition, it is expected to consolidate Sequent’s position in the European market.The company posted calendar year 2019 on a very positive note and expects to carry forward the growth momentum with return ratios improving resulting in robust operational cash flows. The prospects of the global animal health sector is witnessing exciting growth opportunities and consolidation driven by population expansion, increased demand for animal protein, changing lifestyles and evolving habits.There have been recent reports that private equity investors are in initial discussions to acquire animal healthcare company Sequent Scientific Ltd. The transaction which is being pegged at about Rs 2,500 crores will see the exit of founder promoters of Sequent, including Arun Kumar, KR Ravishankar and family which  together hold about 56.5% stake in the company. This will also involve an open offer and if fully subscribed, the new buyer could end up controlling more than four-fifths of the company. Many analysts expect the stock to flare up in the coming months and is a good investment opportunity. The Sequent Scientific  stock quoting at Rs 83 is a strong buy candidate for portfolio investment.

Rajiv Kapoor is a share broker, certified mutual fund expert and MDRT insurance agent.