bipin savla,
I dont track either mahindra holidays or plastiblends. I think there might be threads on these companies where u can find some viewpoints.
Hi Hitesh,
Your views on Internet of Things related companies like 8K Miles / Kellton Tech / Cambridge ? All these companies are talking of multi-fold growth in next few years . Do you have an idea or perspective on them or any other company which is better than these three?
-Regards,
Vishal
Thank You Hiteshbhai for prompt reply ,I asked for your views beacuse I found some valuable insights from you and Donald on the thread of plasiblends posted by you earlier. thanks anyways .
I dont know what internet of things is.
Outside my circle of competence.
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Jumping in on this topic, I work for an Internet of Things( IoT) company so feel qualified to answer this. IoT is definitely a booming sector and no doubt would continue to boom till 2025. They have a potential 12B$ market in India(http://yourstory.com/2014/06/internet-of-things). However IoT in India is still at venture capital investing level, not much at value investing level, as very few companies in this sector are public. No wonder Sequoia Capital, Softbank, Khosla Ventures are heavily investing in Indian IoT companies. Generally these companies go public late when most of the growth has already been encashed by Venture Capitalists, if you observe Fitbit(https://www.google.com/finance?q=NYSE:FIT) one of earlier IoT companies they didnāt have a good time after going public.
Coming to your list of companies, not sure how much of IoT company these are, my hunch would be even if they are IoT based companies they would be working in B2B model with some parent IoT company which reduces their potential to grow, correct me if I am wrong I havenāt researched on these companies at all. Secondly I found they are trading at a very high PE and have soared a lot over the past year or so, according to my quick check the valuations didnāt quite look attractive looking at todayās price.
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Hiā¦Hitesh, Do u still track Tube Investments & Zensar Tech?? Whats your view on recent stake sale in Chola MS insurance and PE investment in Zensar??
Disc - Invested in Tube Investments & Zensar frm lower levelsā¦
@Hitesh Sir,
I would like to borrow some of your expertise in Technical Analysis. In one of the threads, you mentioned Edwards and Magee. I will be ordering the book today.
Please suggest some more books which can help me learn Technical Analysis.
Hi Hitesh can you share your current tech view on Pi ind - has it changed from your earlier recent observations of broad bands of 620-660-720 ā¦thanks for your time.
reacher
Broadly the range remains the same. But the stock price seems to be showing some resilience in a weak market.
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Hitesh Sir,
What do u advice in such markets, start utilizing the cash 5 to 10 % in each dips in favourite stocks or just wait for a clear trend to emerge.
Thnx.
Jugal
Look at 8k miles thread for discussion on this matter.
@jugalmoney, I think there is a lot of pessimism and fear in the markets and it would make sense to start deploying cash in small lots if one is sitting on them. But I feel it might take a while for this doom and gloom to clear from markets. So one can buy in lots.
@ samir, I dont know exactly which companies will reach the large cap status in next few years but some I remain bullish on some companies I own like ajanta, torrent pharma, alembic and shilpa medicare.
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Hi Hitesh,
I have a basic query would be greatful if you could explain:
I was going through investor presentation of Granules India and found below:
āTo provide a cost effective manufacturing base to innovators for their products when they go off
patent - this will help Omnichemās customers decelerate loss of market share for their brandsā
Could not understand above does the above statement means that a innovator manufactures it products itself before it goes off patent and oly after the patent expires will they outsource the manufacturing.
Also if at present they are manufacturing why cant they continue it even after the patent expiry.
Regards,
Kapil
I might not explain as well as Hitesh Bhai but will get it a try.
When a drugās patent is still effective, margins are very high and innovator can manufacture it in their home country like US where manufacturing cost is high.
However, when it goes off patent, margins crash and manufacturing the same drug in US does not make economic sense. This is where innovators can pick Omnichem to manufacture same drug at lower cost.
I hope this helps.
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Hitesh, understand you exited Ajanta completely sometime back as switchover to another pharma. Have you now re-entered Ajanta again ?
If we have to compare Ajanta with Torrent, understand Ajanta is a more predictable growth business (US a new growth driver) than Torrent and this is why it is commanding a high PE. Is this a right understanding ?
Going forward if Torrent delivers good consistent results, can it be a fit case for a re-rating by the market ? I am asking this question to have a better understanding on which one looks to deliver higher returns if someone has to choose among these two by deploying cash now ?
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Hi Hitesh,
Just wanted to pick your brains on how you deal with a typical dilemma situation (for me personally).
I own neither of the stocks mentioned,they are just examples.
I own company A (say Torrent pharma).
Theres company B (say Ajanta Pharma) which I have liked from a long time but never could buy coz was not comfortable with the high valuations.
When I bought, company A seemed a more compelling bet due to valuations and 1-2 year outlook, as compared to B.
Thanks to the current market corrections, company A has corrected 10-15% than my buying price and B have corrected a lot 30-35% and now definitely seems like reasonable valuations.
Not that company A is bad (else I wouldnāt have bought it in the 1st place), but company B has been a wonderful performer and in my wishlist for a long time.
I understand that price anchoring is really not good for an investor and I tried to avoid it but I guess its easier said than done for mortals like us 
in terms of conviction levels I feel company A also would give decent returns. but also tempted by the fact if I will get such an opportunity to enter company B in future.
I hold a concentrated portfolio, hence I guess taking a loss (when your theses of buying company A is not even changed, in fact its more compelling to add more since 15% drop) and making a switch causes such a dilemma.
if you have the time, would love to get a detailed insight into your thought process.
Thanks as always,
Niranjan
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@amit, Regarding the comparision of torrent and ajanta as you know both companies are different though in the same sector.
Ajanta is a consistent grower with very little by way of revenues from US geography. And torrent has lumpy earnings due to US exposure.
Markets usually love consistency and predictability. That is one of the reasons why Ajanta is commanding much higher valuations as compared to torrent.
In case of torrent I find that most analysts and investors are totally stumped about what to expect as earnings for fy 17. And hence people are not able to assign a proper valuation to the company.
But going ahead as you mention if torrent were to deliver consistent results then it also might command higher PEs. Even a sign of higher predictability would bump up PE in its case.
I see a lot of triggers in torrent going ahead. They have indicated that they will be aggressively filing more ANDAs in US markets from q1 fy 17. Plus they can use the cash pile generated by abilify windfall to do some acquisitions if they find it attractive. Or else retire the debt. (debt of 2100 crores if retired would add around 200 crores to PBT directly)
In domestic markets they are now in aggressive mode in launching the new class of drugs called biosimilars. Its a sunrise sector in pharma field. Plus once the domestic growth gets back to normalised rates post the restructuring they are undertaking in terms of removing discounts and schemes etc the revenues would be more predictable.
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