Mumbai, Feb 25: The takeover will not only mean a better ORG ranking for Wockhardt, but also a wider product range. Wockhardt's ORG ranking is nineteen, which after the merger will jump to ninth, while its therapeutic product coverage will increase substantially from 29 per cent to 42 per cent. An overnight increase of 13 per cent in the product range will be a big boost for Wockhardt shareholders.The company has a strong presence in the pain and inflammation, anti-biotics and anti-bacterial, antisepsis, respiratory medicine, cardiology, paediatric medicine and parentral nutrition segments. Spasmo-proxyvon is Wochhardt's top selling brand in the anti-spasmodics segment with a market share of 13.9 per cent and sales of around Rs 11.24 crore. The product is, however, growing at a rate of 3.5 per cent. Pelox, another top selling brand of the company in the quinilones -- pefloxacin range, has a 2.4 per cent market share with a turnover of Rs 8.48 crore and growth rate of 39.9 per cent.
Among the other topselling brands of Wockhardt are Proxyvon a dextropropoxyphene analgesics, Aziwok in the macrolides - azithromycin range, Sparx in the Quinolenes - sparfloxacin range, Wokadine a dermatological anti-depressant with a market share of 14.5 per cent, turnover of Rs 9.78 crore and a growth rate of 26.7 per cent.
In the case of Merind, its strength lies in corticosteriods, Vitamins B12 and neuro-psychiatry areas. Among its major brands are the Decdan range of systemic steroids -- dexamethasone segment. The brand tops the segment with a market share of 21.6 per cent, turnover of Rs 7.88 crore and a growth rate of 24.2 per cent. Practin, an appetite stimulant, has a market share of 12 per cent, turnover of around Rs 2.87 crore and growth rate of 36.6 per cent.
Among the other top selling brands of Merind are the antidepressant, amitriptiline range (Lifotryp + Tryptomer). Lifotryp has a market share of 7.7 per cent with a turnover of Rs 4.4 crore and growth of 39 per cent.
Tryptomer's market share is 6.6 percent, with a turnover of Rs 3.81 crore and a growth rate of 98.2 per cent.
The only products which are common between the two companies are in the cough syrup and anti-TB range. The combined ranking of the cough syrup range (Zedex of Wockhardt and Viscodyne of Merind) is fifth, while that of the anti-TB range (Wokex of Wockhardt and Cavi of Merind) is fourth.
Contribution of these two products is however, very small as compared to the total turnover. In other words, the wide range of established products of both the companies will benefit Wockhardt's shareholders. The main benefit for Wockhardt will be its entry in the high margin neuro-psychiatry segments, anti-malarial (through Tata Pharma) along with the animal health business.
Tata Pharma's performance has been affected by cheap imports of chloroquine phosphate and a ban on analgin combinations. However, the company continues to sell the anti-malarial range by importing bulk. With an established brand in the growing anti-malarial segment, Wockhardtwill gain from the acquisition. Another area in which Wockhardt will gain access is the diagnostic market developed by Merind, which has shown marginal growth rates. With its own presence in the international market, Wockhardt will be able to exploit the image and network established by the export division of Tata Pharma.
Merind, Wockhardt dominate trading on NSE
The news of Wockhardt taking over Merind, triggered off fresh buying at both the counters with the stock prices zooming up over 10 per cent in a single trading session.
Reflecting the positive impact of the merger, market players continued to pick up the stocks at the highest bid. Backed by analysts' reports of the trickle down benefits to Merind, local and FII operators made every attempt to build fresh positions at the counters. Merind opened with a gap of over 10 per cent at Rs 194.10 and transactions involving 2,450 shares were registered at the counter.
Since the Bombay Stock Exchange was closed on account of Mahashivratri,buying was concentrated on the National Stock Exchange, where Wednesday was the first day of the new settlement. At Rs 194.10, the stock hit the price band on the upper-end, with a huge outstanding buy order of 18,600 shares.
Similarly, the Wockhardt counter also opened with a gap of 2.8 per cent at Rs 201 over Tuesday's close of Rs 195.50. The scrip was traded in the band of Rs 201 and Rs 209.95, the intra-day's low and high respectively, to close at Rs 209.80, registering a gain of 7.31 per cent over its previous close.
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