Lasa Supergenerics Limited

(paresh.sarjani1) #368

Yeah i am tracking both and invested in Sequent too.

NGL and LASA can be compared.
Not sequent

(paresh.sarjani1) #369

And Omkar Herleker is not benefitting from selling by SVAKS as at the time of demerger only he ceased to be director from all other companies

(Nolan) #370

Dear @ankitkhemka7 , There is nothing wrong in smelling a rat or presenting a counter-view. It always helps in testing investor’s conviction. Lasa might be having issues at the moment but then almost all micro-caps do hold an element of risk, so someone investing in micro-caps must be open to take a bit of calculated risk…

I have chosen to ignore the narrative around promoter holdings and Parent Company linkages. These I believe are short-term in nature and do not present material evidence to conclude decisively. Having said it, I am staying cautious. Meanwhile,there is no change in the opportunity landscape for Lasa, and it will not take time to bounce back as and when it gets reflected in result/s. In contrast, if the operational performance is not in line with expectations, then it would be prudent to revisit one’s invt thesis. Sometimes we make simple models complex by introducing too many insignificant variables. If only we stop once and reconsider the reason/s why, in the first place, we invested in a company, the decision model becomes simple. For me, Lasa has been a high growth business from the time OSCL acquired it and future potential is also good. Promoter promises a moderate growth of 20-25 percent going forward. As long as they deliver on it, rest is all clutter. This, however, is my approach and may not match with others on the board. If, someone concludes that Svaks selling their stake (or other similar stories) is/are significant variable/s, they can accordingly assign them weights in their decision model.

(phreak) #371

One can always complain about the portion size at a restaurant even if they don’t like the taste of the food. Nothing wrong with that.

I was checking OPM of last FY for comparison. I see that Lasa does have 20% in the last three reported quarters. If they can maintain that going forward, they have roughly over twice the sales as NGL Finechem and by that metric, they might actually be undervalued (relatively of course). EV of NGL is 290 and Lasa is 350. So with a 20-30% discount (what I will be comfortable with paying) for past issues and the demerger (Which I thought was a well-planned value-unlocking for the promoter’s family but not for everyone else), the current price might be cheaper by 20% even with the governance discount of 30%. However, I am willing to wait a couple of quarters to see what else the promoters might be upto, other than running the business.

Disc: Not Invested

(8sarveshg) #372

Few points to be noted here lest we get into a very generic discussion on this stock:

  1. First of all, there are two types of equity investment opportunities - one is characterized by proven track record, established quality of both management and business and hence to an extent commensurate high valuations which persists even during bad times when the business is not performing so well or markets are in bear cycle. These businesses if held for the long term can comfortably beat the market. In short a portfolio of such stocks can give you a very comfortable retirement but not make you wealthy.

  2. The other set of equity opportunities are exactly opposite of the first one - an unproven track record, low quality as determined by either numbers or the perception of the real numbers, perceived low quality of business or management or both. Such businesses, however also trade at commensurate low valuations. These businesses are very risky for most investors as numbers alone wouldn’t justify making an investment. LASA comes under this bracket currently. Most retail investors/non-professional investors should certainly stay away from the same. However, in these investments, if one is right and has a decent position - such investments have the potential to make one not just comfortable but wealthy. On the flip side, if one is wrong, one can loose a large part of their total investments also denting prospects of a comfortable retirement.

  3. Unfortunately, I have noticed that a lot of retail / newbie investors fall in the trap or lure of high risk/high returns opportunities like LASA. They seem to mostly rely on the herd behavior and shallow analysis/ comments which seem to be coming from seemingly expert sounding investors on online forums and blogs. Such investors fail to realize that most of the bloggers and writers on online forums are themselves just novice investors who have read a book or two on value investing and/or Buffett and lack the experience of a true bear market like that of 2009. Its not that the intentions of these so called expert bloggers and online commentators are bad - its just that they have only seen the last few years of bull market in small caps and suffer from lack of full cycle experience. They also fail to realize that in most cases (not all), small caps are just a leveraged bull market bet - providing significantly higher returns in the bull markets and also falling significantly more during the bear markets. This was amply displayed in the present correction where NIFTY has fallen by just 8% from its peak but most small cap portfolios have fallen by more than 25% with over 1400 stocks trading at 40% or more lower than 52 week high.

  4. This is not to say that some one should invest in LASA or that LASA is a bad investment - the important thing is that one needs to understand what category of opportunity it is and what category of investor one is. And then what kind of volatility one can stomach (very important in bear markets as most people are just unable to bear volatility no matter what they think of themselves in bull markets). So, if one is investing in a company like LASA, one better be a very good analyst of the same stock, which means - one should have met and gained comfort from the management if one thinks meeting management is useful, one has done a lot of independent primary work and also and very importantly one comes from a strong enough financial background to withstand volatility as well as have ability to buy more in the fall if one has the conviction. This kind of work is better left to truly experienced and competent investors - so one needs to do an honest review of what kind of investor one is and then only indulge in such investments. Hearsay or just reading comments and thoughts of other people on online forums will never give the conviction to either take a large bet or double down when the stock falls. As someone has said, borrowed conviction can never make your wealthy.

  5. What is also less useful and significantly low efficacy path is just doing basic comparison on usual metrics like EV/EBITDA, Debt to equity etc. - microcaps can quickly change colors based on small changes in numbers. A 2 cr saving on rent can suddenly make the stock cheaper by 30% or sale of one historic land parcel can double the net-worth - so numbers are important but that analysis should come later once one has developed a good understanding of the business and is having a high conviction on the same.

  • For example, given that what we now know about Omkar’s result, I can’t help but comment on the futility of excessive number based research approach when it comes to such stocks. I am sure many would have read this report - - this is perhaps the most comprehensive number based analysis on this stock. However, did reading this research piece help a common investor much - I don’t think so. Arm chair investing style will seldom work in such cases.

So overall my hope is that small investors who are generally incapable of doing in depth research will stay away from such hope based investing which is generally catalysed by equally incapable/inexperienced people writing online doing just arm chair analysis. At the same time, I hope that the capable, experienced and those who have the requisite time will also have the tenacity to do a thorough piece of independent work rather than just dismissing such potentially wealth making opportunities on the basis of simplistic arm chair/ratio analysis.

(grohal) #373

There are hundreds of small cap stocks which have gone up more than 10 times since 2014. But earnings/revenue are not up even 2 times for almost all of these stocks.
This is the first filter we should apply before looking at any mid/small cap stock. Because when the next bear market hits us, all of these will be beaten down to levels where they belong!!

(paresh.sarjani1) #375

LASA circuit revised to 10%

(akash123) #376

(post withdrawn by author, will be automatically deleted in 24 hours unless flagged)

(bullrun1988) #377

Lasa Supergeneri insider trade Disposal of equity shares worth Rs 36.96 lacs by promoter now Pravin Shivdas Herlekar having only 2% & RISHIKESH HERLEKAR having 0.83% of lasa.

(sta) #378

The good part is that Mr omkar has has not sold. And has more than 31 percent now. The pressure on the price will continue till Mr Pravin and younger son are completely role out

(nkgambhir) #379

Due to regular production from unit 4 and due to passing on of increased costs to customers, I am expecting buoyant Q4 and therefore a fy18 eps of 12.

(bullrun1988) #380

Any link of this news??

(Salman_kn99) #382

Can you tell me how did you get share holding pattern till April?

(sta) #383

Search insider trading for lasa. The photo that I have submitted will come.You can infer from the data given

(Salman_kn99) #384

But Omkar Speciality Chemical holding somewhere around 5% & thats one of the reason prices are falling. See news below:

BRIEF-Omkar Speciality Chemicals Working On Solution About Bank Of Baroda Declaring Loan Account As NPA Source text - Further company coverage:

(sta) #385

Ya that could be a reason. But the constant selling by father and son is not letting the price increase. Until they have completely sold out I do not expect any up move

(Salman_kn99) #386

Not only that one. Omkar as a company has 5% stake in Lasa which i think has to be zeroed. Any how his father is keep selling. It is now less than 2%. i have invested small portion in it. Let see if we get clarity may think to raise stake. I am also following sequent which looks ok as turn around story. Waiting for Q4 result, if positive will invest in as well.

(Salman_kn99) #387

Yes you are right. One can compare NGL & Lasa as both in veterinary chem (med) business, whereas Sequent, after demerger is basically animal food business. This is what i heard this week in TV interview given by Sequent Management. After demerger it is going to be debt free. Company is turning around. This year will show profit of 35cr & management is interested in expanding to newer territory such as USA & Australia.

I have small investment in Lasa & following other 2. I may enter Sequent shortly, waiting for some market correction. NGL FY2018 result is looks like lackluster so one can catch up this company later as well if one of the above company couldn’t show any improvement. Also market is at top if one wants to enter in NGL can enter at lower level once market corrects.

(bullrun1988) #388


([email protected]) #389

What to do with lasa and Omkar ???