Yes,excellent numbers again.The Sales growth too,has started picking up now,in-line with the guidance in their AR.The stock has re-rated significantly,so upsides maybe capped in the short-term,but story remains.Eagerly awaiting the Management Q&A 
Disc.: Still have a high allocation to APL.
Alembic pharma eyes niche segments in US, EU
“We have planned to focus more on areas like cardiology and respiratory in the donmestic market, and for the international market, we are looking at moving up the value chain and launch more complex products, like anti-depressant pills, anti-diabetic, dermatology etc. We are looking at more niche segements,” informed R K Baheti, director, finance, Alembic Pharmaceuticals.
Hi Guys,
Alembic Pharma Management Q&A Jan 2014, for your perusal.
Sorry for the delays - first due to travel and then in catching up with backlogs :(. Capturing intense discussions like these (from my hurriedly scribbled Notes) takes at least couple of days for me.
Look forward to your inputs, on why this should/shouldn’t be on everyone’s list of high quality business.
Cheers
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Donald,
Thanks for the mgmt Q&A. A joy to read.
InternationalGenerics / International Branded, Indian generics/indian branded.Please demystifythe jargon for us.
The following question after the leadership questions shows how well it was prepared for…kudos…
“Alembic has always been known as a pedigree company. But this aggression is new-found? While this culture may now be top-driven, what about the Team? How will the old Teams adapt?”
With my limited experience, I would say, they have one important ingredient for success.
Product identification Files along with a reasonable pipeline. And they will move to a high quality business category once the marketing/distribution network is in place to capitalize this pipeline.
Thanks,
Atul
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Hi Donald,
Thanks for capturing the interview so well. Its actually amazing as to how the things are changing at Alembic. The co had got left behind in the whole pharma sector and its now that the new generation has got involved in the business and changes seem to be coming in.
The pipeline seems good and with the experience and old standing in the industry, it seems they can deliver.
Regards,
Ayush
Disc: Invested from before
Hi Guys,
Alembic 2014 Link: …/…/…/company/alembic/management-q-a/management-q-a-sep-3-2013 , ](…/…/…/company/alembic/management-q-a/management-q-a-sep-3-2013) 
.
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What a super interview. It just took my understanding of the pharma business 2 notches up. Hats off to you Donald for presenting it so plain & simple. Feeling fortunate to be associated with this forum and such awesome bunch of people.
Thanks Atul, Ayush and Raja.
This is the 3rd time we are meeting Alembic. Indeed it has been a pleasure each time we met up with them. We always saw energy, we saw very confident body language, we got the answers we wanted - except I must confess, we were inadequately prepared the first 2 times - to extract the most out of the interview:(
And I must confess - I was guilty of bias - I was guilty of underestimating what we could see before us - but perhaps chose to give more importance to the earlier history:(.
Yet the company has been walking the talk, every year. The numbers reflect the changing energy, the improving margin picture gives credence to the claims and despite significant setbacks, the story keeps getting better.
Think we should look at this business and pay close attention to what is happening - difficult not to see that this is a business in an upward transition curve!
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Hi Donald,
Thanks for the update. I had one question that I missed so incase you get a chance to get back to the management can you ask it. The question is regarding subsidiary companies or companies with the same promoter.
How is procurement of APIs done from subsidiary/same promoter owned companies (specifically Paushak ltd, a traded company on BSE)? How is the margin decided? Do these companies also supply to other pharma companies? Are there any plans of a merger?
Disclosure: I am invested in Paushak but not in Alembic
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Hi Anant,
Ayush is the best person to answer this query. He has interests in Paushak (I think) and had quizzed the Management about it.
Will you come to Delhi for the meetings or will be on Phone/email???
Would love to go with you on such meetings. Frankly speaking I wouldnt be able to add much meaning to this meetings but would like the opportunity of learning from you and the process.
Hi Anant,
If you check the Annual report of Paushak, very small portion of transactions (<10%) are with related parties. So I don’t think they are supplying much to Alembic.
Paushak will most likely remain listed as they have the license for manufacturing of phosgene gas (one of the few cos in India to have this licence) and as the same is hazardous/dangerous in nature, so the licence may not be easily transferable.
Regards,
Ayush
Hi Donald,
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Thanks Ayush for the response. I should have checked the related party transactions in Annual Report. Would like to hear your views on Paushak since it appears decently undervalued.
Hi,
Had got in at about 70-80 levels as at that time the valuations were extraordinarily attractive…have done some profit booking recently. Though it still looks undervalued but I don’t think it would get high PE as there is very low visibility/clarity/ on future. Many often one has to just follow the results to take a call.
Ayush
Hi Balkrishna.
Had missed seeing this. Sorry for the late response.
We usually do not have more than 4-5 people at a Management Q&A (face to face). More than that becomes a crowd and difficult to control the discussion flow - where our flow and focus is extremely important - not to get diverted in lower priority issues, e.g. - and to extract as much of what we had planned for.
However we always give 1 newcomer a chance at every Management Q&A. But that newcomer has to put his hand up - believe he can make a difference - slog hard over data collection and analysis - surprise us with something - before a nod is given. “I wouldn’t able to add much” attitude is not done :). We believe all it takes is sincere effort - its not an intellect game.
The good part is nothing is by way of assignment to anyone. Its purely your own interest in a business - that itself will drive you to work hard to first understand - business and industry issues - and than question hard - cover all possible angles, etc… if someone does the hard work and comes upto reasonable newcomer speed - we always give a chance, for sure. Most times just the interest/passion to work hard at understanding …is enough…its mostly common-sense logical work :). Participation in ValuePickr Forums - digging up data and sharing that, pointing to insightful reports and interesting links,own analysis,questioning hard …that’s what it takes…just simple sincere hard work…not staying satisfied with what is known or what others have put up…making that extra effort to finding the gaps…and filling in the gaps as possible.
That’show folks like Vinod MS, Omprakash, Tirumal, Dhwanil and others have qualified to join in. We usually can’t carry passengers - because we like to do our job with passion - and want to see that in others - we can’t afford to do it any otherwise.
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Interesting article on USFDA and its recent actions against few Indian Pharma companies.US Food and Drug Administration (FDA) CommissionerMargaret Hamburgrecently visited India.
Click here
Vamsi- that URL doesn’t resolve for some reason.
Perhaps you meant to link up these?
Completely respect what you say and its not that I dont want to do the hard work but its more like I dont know where and what to look at, what matters and what doesn’t… I agree my participation on the forum has been low but I have always tried… I started trying with Caplin Point but with promoter integrity in question I couldn’t live with that & left it there… and I have pitched whatever least data I knew in all the threads I could…
Now I am taking up Idea Mobile for my research this week… I will post eveything I find here… looking forward to guidance from you… The problem is as soon as somebody posts anything on the forum all the members get on it and all the initial data comes on the table in a matter of days… I shouldnt actually be complaining about this coz thats the strength of our forum… but a new learner like me gets overwhelmed and somehow I lose track… I agree its completely a negative that I need to overcome…
Pls tell me 1 small delhi based company which are looking for upcoming Q&A… The one which is simplest of the lot and I will work on it & give it my best…
Thanks!
. . links,own
Will you come to Delhi for the meetings or will be on Phone/email???
Would love to go with you on such meetings. Frankly speaking I wouldnt be able to add much meaning to this meetings but would like the opportunity of learning from you and the process.
& pls no sorry business with me. i should be sorry for telling you to just tag me along.
Has anyone looked at how the recent US stand off especially w.r.t pharma, lowering of ratings, increasing barriers to enter etc would affect Alembic’s future prospects?
Thanks for adding up Binu! Indeed 