Piramal has been stagnant for like 8-9 months now. Is it consolidating after a huge rise in Mar-April, or is market waiting for all the recent acquisition (pharma products & DRG) to bear fruit?
Anyways, I did some back of the envelope calculations:
Total equity fy '17 = 15k cr
profit fy '18 = approx 1500 cr
Money raised this year = 7k cr
Shares outstanding = 17 cr existing + (7k/2380=2.94) = around 20 cr
Book value per share for FY '18 = 23500/20 = 1175.
Stock available at 2550 implying 2.2 times book
Other OTC pharma companies (GSK, Merck, Sanofi etc) trade at 5-10 times book. PEL’s Finance could also command a 3.6-4x considering its growth potential and high ROEs. I won’t give it a holding company discount because I like both their Finance & Pharma businesses, and, demerger toh hona hi hai.
A company with promising businesses, very strong governance all the more so important in India (the 50k crore Vakrangee comes to mind ), a mind-boggling track record of superior performance, available at 2.2 times book.
@deevee @sgjaclyn @suru27 @sajijohn
Experienced VPers please point out the flaws in my reasoning as it seems in my excitement (especially today during market carnage) I would surely have overlooked some serious facts.