You are right.
There will be multiple players
But oppotunity is also huge atleast for short term
I had asked my medico friends.All are prescribing FAVIPIRAVIR in selected patients.
Numbers are out and look goodā¦ Overall gross margins have improved along with cash on hand due to decrease in receivables
1 Like
Last year both sales and profit declined. Overall consistent performance over the last 10 years. The stock price has declined in the last 3 to 5 years period but both sales and profit have increased consistently. The company has also released FAVIVENT a few months back which is in huge demand right now.
I believe it is a pure case of price-value mismatch. Jenburkt Pharma is currently trading at 11PE w.r.t its TTM earning with zero debt and positive cash flow
Disc: Invested
Company having 66 cr cash as per sept 2020.
It means Rs 145 cash per share with nil debt.
Discā¦invested
Was reading about the company: Salary numbers are big for the top management
15cr PAT companyā¦ Mr. Bhuta take home is 3cr per anum+++ : ( ~20% pat) is this normal for these size companies?
(Pg9: AR:: Remuneration: Salary of ` 24,00,000/- (Rupees Twenty
Four Lac only) per month w.e.f. 1 April, 2021 up to 31
March, 2024 with an annual increment effective from the
st 1 April every year,)
Pg10: AR
Past Remuneration: for F.Y. 2019-20 ` 173.91 Lacs,
per annum
so > 66% jump!
A year when top line was down from 122cr to 118 crā¦ profit down to 14.86 cr vs 19.79 cr
Pg33::
Only two employees viz. Shri Ashish U. Bhuta and Shri Mahender Paul Singh have drawn remuneration in excess of ` 102.00 lacs during financial year 2019-20.
how does one read this?
cash flow is + (15 cr), return ratios + , good brand presence:
valuation is cheapā¦opportunity is big for this base atleast ( FDC, Ajanta others are doing well in the OTC space)ā¦ growth is needed hereā¦
Dis: not investedā¦ on watchlist as on today
1 Like
I had talk with MR of jenburkt pharma.
As per him ,due to covid
1ā¦They could not launch new products
2ā¦Routine opd was disturbed so sales were affected
Their few products are well known in market like powergesic gel,triben cream, R T cure
nervigen, etc
As per MR,Promoters are very honest.There is no commission system for selling products.
I think ,we need more patience for this stock.
Discā¦invested
Positives:
ļ§ The company is maintaining its high-profit margins continuously. Very low debt with a lot of cash on the balance sheet. the management is conservative when it comes to funding growth through debt.
ļ§ The company pays good dividends. The receivable days are going down, the inventory turnover is getting higher.
ļ§ Management is of high repute. There are no red flags. They have done a lot of philanthropy in the area where the factory is.
ļ§ Promoters bought recently (Decā22 to Marā23, 45.96% to 47.56%)
ļ§ The PE, at 13.5, looks decently valued.
ļ§ Great ROCE and ROE nos. The company is not that capital intensive (basis their CAPEX)
ļ§ 83% of the companyās revenues are from India and the rest through exports. I understand from https://www.youtube.com/watch?v=-Z1NNJ7x9O8&ab_channel=OmkaraPathshala that in the Pharma sector, the companies whose majority of revenues are domestic have a higher ROCE and better-working capital parameters. Hence this is considered a positive.
Negatives:
ļ§As investors have pointed out earlier, MD remuneration continues to be high (~10% of PAT) which seems to be high as per SEBI regulations. The usual range of promoter salary is 2-5% of PAT.
ļ§The % of employee costs to that of sales is also high.
ļ§The company is not able to convert all its profits into cash. The cumulative PAT for 10 years is ~157 crores but the cumulative CFO is ~128 crores. The difference of 29 crores in which the working capital struck is around 13 crores.
ļ§Though the earnings yield (11.8%) is higher than FD, the actual earnings growth has been slow. |
ļ§The company is most popular in the western, central regions of India and not pan India.
ļ§Jenburktās domestic product portfolio is predominantly acute medicines and not chronic medicines. And these acute medicines will have seasonal variations, unlike chronic portfolio products. This is one of the reasons for the cyclicality of the prices.
ļ§There is a consistent line item āPurchase of Stock-in-Tradeā under āExpensesā in the P&L statement. This amounts to ~21 crores every year. Given the companyās PAT is ~25 crore, this is a significant amount. āPurchase of Stock-in-Tradeā usually means that the company is directly purchasing finished goods from somewhere else and then selling them. Since 21 crore is a significant amount, if we can know why the company is doing this instead of producing the same stocks on its own (this will impact profitability), it would be useful. The annual reports (Note 29) do not reveal any information. The company does not organize con calls also. And since the company keeps debts under its control and has a lot of cash sitting in the bank, it does not need a credit rating. Hence there is no credit rating report as well to get further information.
Verdict:
- The sales growth is modest. Looks like a medium grower (āStalwartsā as per Peter Lynch, if stock hits 50% in 2 years, then SELL) with decent dividend payouts.
- The company looks like a safe investment with limited downside, thanks to conservative management who are efficient capital allocators.
1 Like
Jenburkt is conservative company with good products and reputed management.
However ,there is lack of hunger for growth.
There was plan for injection plant before 2yrs but still it is in air.
Disc
Exited at loss.
1 Like