Why to exit ajanta pharma ???
1). It is giving 25-30% growth constantly
2). It is noncyclicalstock.
3). No debt.
4.promoterisincreasingstake.
we r selling due to only priceappreciation. which was our 1st motto to get priceappreciation.
think over it and decide. ( suno sabki karo apni )
It might boil down to individual choice. I used to be a buy and hold guy. Still am - I have some stocks that I have been holding for years.
With the knowledge gained here, now I see some value in booking profits when technical indicators/delivery volumes indicate that it is possible to buy back the same stock at lower levels.
HG-ji,
Does you calculate profit post tax and frictional cost in your analysis.
Suppose I buy a stock @100, and after sometime I get a chance of selling at 200, so paying 15 as STG tax, and 3 as trading cost (approx). So you shall benefit only when stock goes down to 200-18=182 or below. Otherwise you are at a loss for sure.
By looking at the chart of Ajanta in last 2 occasions, seems like a real tough job to do for me (I mean the timing of exit and entry).
Most folks forget about this rs 18 (here ~18% of profit), and feels they are getting an entry point at a lower price and it is an nice strategy.
Re-entry to same stock also extends the short-term tax giving period by the amount of time you have hold your stock, so you might have to pay tax multiple time.
Regards,
-Subash
I did a rough calculation on hold-for-long-term vs sell-on-low-delivery for Ajanta. The expected gain in later is some 9% extra provided you did the timing in a pretty good manner. Seems a risky strategy to me, as I will have to pay ST if I want to sell within a year or so.
Pretty much everything is on approx figure here.
| Date | Price | Investment | Tax Outgo | Return | Unit | Gain | ||
| 1-Apr-12 | Initial Inv | 244 | 10000 | 40.98361 | ||||
| 5-Apr-13 | Sell | 767 | 31434.43 | 214.3443 | ||||
| 1-Apr-12 | Initial Inv | 244 | 10000 | 40.98361 | ||||
| 30-May-12 | Sell | 370 | 785.96311 | 15163.93 | ||||
| 6-Jun-12 | Buy | 315 | 14377.9713 | 45.64435 | ||||
| Sell | 570 | 1765.4095 | 26017.28 | |||||
| Buy | 550 | 24251.8719 | 44.09431 | |||||
| Sell | 767 | 1460.6351 | 33820.34 | 223.597 |
Guys, I donāt do this with all my stks. How I wish they were like Ajanta too 
Secondly, just to be clear, I trade max 20-25% of my LT qty, only because Iām a sissy salaried chicken who gets paid on 31st of every month. And once Iāve PPBed, Iām on prowl to cover it back on any decent fall.
Subhash, Iām also as early investor as you if not even before in Ajanta. Iām sitting on this tight too. But every now and then mkt makes up its mind, and you can see it turning into hot potato and price shoots way past the most optimistic valuations. In that case I see it appropriate to lock some gains and buy more of the same on subsequent falls. Touchwood it has worked fantastic till now. I see it as basically the mkt offering you a Diwali bonus (except that Diwali may come 3-4 times a year). One just has to keep our greed in check and skim off whatever cream we can get.
Also, thereās something to be said about overall dicey-ness and volatility of our mkts (other than std investing risks). One never knows what cockroach will come out from any co. Since Iāve lost paper profits on other buy-n-hold names, I also know excruciating pain that comes from identifying a good stk, ride on to see it gain 70-100% in a year or two and then see it steadily retrace all the gains within a quarter or two ā all before my eyes, even as I continue to Buy and Hold. These paper losses hurt as much as out of pocket loss. So over a period of time, Iāve adapted away from pure Buy-n-Hold. Now I use basic TA to see if I can get better entry/exit pts. With more succcess gradually Iāve even added pure TA-based trading in SunPharma to my arsenal. Feels good to get a 10-15% hitter within a month, every now and then, irrespective of whatever Sensex is doing.
Pull out a daily candle chart of SunPharma or Wockhardt with 50/100/150 dma - (If someone knows other similar charts, pls tell me) - you CANāT NOT see the pattern. It just reveals itself with a good 70-80% hit-rate.
Take another extreme example of Ajanta itself: See snippet attached, 30thMayā12. Thatās a 25% trade in 10 days. Vols shoot up 10x, delivery percentage drops from 30-40s to measly 6%. Closing is not near the volatile high. Also chk Avg Traded Price vs High Price columns in historical data on NSE. On all prevs days they are within 10Rs gap. On 30th gap widens to 30. Itās almost like there are multiple divine signs in chart trying to tell us itās all fake-fake-fake-fake. That freak high of 400 returned only after 3 months, briefly, went under and traded sideways until Janā13 breakout. So basically mkt offered us same returns 7 months before this time it gives it for real? Iāll take that with reasonable probability.
Anyways, agree with Gaurav: Suno sabki, karo man ki Finally one has to be comfortable with whatever style one has adopted. Iāve never understood why these epic long-running FA vs TA academic argumnts (similar to Unix vs Win, vi vs ed in tech world)
Iām not here to convert anyone. Rather Iām here to convert myself as required. If some newbie like me can learn from it, so much the better. I learnt it from expced seniors here like Ayush, Hitesh bhai, and Hemant, Tony for TA & others outside valuepickr. Just sharing my own hurdles & missteps and learning from others - thatās how one should take it.
Stay Calm & Keep Making Money off whatever style suits you and enjoy it once in a while on a Goa trip 
(LOL #facepalm me. Composing that comment took me a while)
In meantime Subhash youāve already posted yr nos. Good job. Can you post dates on other buy/sell Txns?
Youāre also ignoring the fact that other than the 9% probabilistic edge on overall returns, this strategy (for such volatile stocks) has also helped you take out some profit at regular intervals, incase some cockroach tumbles out of the co. closet and one is at work, while stock hits 20% downcircuit. If you are lucky that cockroach event happens betwn yr second sell and 3rd buy in which case, you are home safe and dry.
Personally Iāve also found that when Iām transacting this way, my price-anchoring bias on both buy/sell side has reduced. At every entry/exit I hv to do basic 1-hr homework which is nice too. Keeps me refreshed abt whatās happening with the co. But thatās an individual thing.
Good and Interesting discussion on short term vs long term portfolio holding. Looks like it got triggered after my post.Hence let me clarify my position.
People sell stocks for various reasons. In my case, I wanted to get out of leverage(I was on 20% leverage) as the market doesnāt seem to be in a good mood for next few months at least. Also I wanted to keep just 5 stocks(Page, Hawkins, Gruh, Titan and Unichem). Hence it was an easy decision for me to sell Ajanta which was just 4% of my portfolio. Ajanta has been a good story and have given wonderful returns without doubt. It should still be a good compounder for sure.
I totally agree that multi-baggers are possible only with long term buy and hold strategy. I have made some real good money only with buy and hold strategy. Page, Titan and Hawkins are with me for over 4 years and will remain probably for next decade or till the story goes bad.
Hello Kamikazi,
Why donāt you add some more arsenal to your technical analysis. Introduce Commodity Channel Index along with RSI and see it will give you excellent entry and exit points. CCI is very easy and similar to RSI. So grasping it will not be difficult. I watched a youtube on CCI and grasped the funda very easily.
(Thx Tony, letās tk it on PM or TA. Letās not hijack Ajanta discn anymore. Me culprit too :< )
the stock has started getting increased interest from institutional investors and should now get the real sustainable re-rating. Its just the sharp price move upwards that makes us jittery but the business is going very strong. Do remember - any stock can be a 20-30 bagger in ur portfolio only if u dont sell it at 3-4 bagger levels. So, have patience and enjoy the returns. if somethng goes wrong with the business - sell out immediately but otherwise it shld give 20-25% annual returns from here for next 3-4 years
My concern is not with the fundamentals but the speculation at 7% delivery.
Better to take partial profits of and redo the fundamental calculations.
Nice falling in price of Ajanta Pharma. Hope the low pricing prevail till month end (better if it fall more). Will get the chance to buy it at a lower price.
Disc: Ajanta Pharma is my top holding (~17% of my portfolio). Have been adding it from last 4 months, in a SIP like fashion, and intend to do so in near future.
Ajanta volatility is giving a good opportunity to trade in a good stock. Was able to buy back some that I sold at 790.
There always seems to be too much volatility in stock price of ajanta in past few trading sessions. Makes one feel jittery.
Personally i have most of the times managed to catch the swings in ajanta recently beginning from 365-70 to 675, back in again around 545-50 to 675 (exited it a bit earlyā) and now intend to wait patiently for a re entry.
Coming to 9M figures then eps for 9m fy 13 is around 32. If company were to report full year eps of 50-55 for fy 13, then at prices close to 800 it was quoting at around 16-14 PE which was not too cheap.
If one were to consider a 25% growth for fy 14 then we have figures of 62.5-69 eps. So prices of 650-700 discount fy 14 numbers by 10 PE barring another spectacular year of another 50% growth. But here one has to be realistic and cant expect company to keep growing at high growth rates of 50% y-on-y for many years in a row.
So for fresh positions I would wait for some froth and optimism to subside and better still, let the stock price settle down in a consolidation zone with lower volumes before taking a call.
A trailing PE of 12 should have some cushion. Hence with and expected eps of 50-55 for FY13, below 650 should be the upper limit in my view. The delivery volume points to a lot of speculative activities, hence there can be quick upside or downside.
hitesh,
How does one decide which is the correct low point to pick for checking the fibonacci retracements? E.g. on the yearly daily chart, Ajanta has made various lows at 250, 400, & 530). I wanted to check the 50% retracement level but not sure which low point to pick.
)- HG
Q4/Fy-13 Results outā¦
Total Income up 41.6% to 249.44 Cr from 176.1 Cr.
EBIDTA up 73.4% to 69.07 Cr from 39.84 Cr.
Net Profit up 14.8% to 27.09 Cr from 23.6 Cr.
EBIDTA margin is 27.7% v/s 26.5% (Q3-13) and 22.6% (Q4-12)
NET Profit margin is 10.9% v/s 14.2% (Q3-13) and 13.4% (Q4-12)
Total Raw material costs as a %ge to Income is 35.8% v/s 37.2% (Q3-13) and 37% (Q4-12)
Employee costs to Income is 13.8% v/s 12.1% (Q3-13) and 14.1% (Q4-12)
Other expenses to Income is 22.7% v/s 24.3% (Q3-13) and 26.2% (Q4-12)
Tax Rate 55.1% v/s 33.4% (Q3-13) and 24.5% (Q4-12)
Lesser increase in Other expenses and material costs as well as employee expenses (as compared to sales) helped EBIDTA. Buttttttttttt
Steep increase in tax that is 33.29 Cr v/s 16.31 Cr (last Q) 7.65 Cr (year back) affected net profit.
Fy-13 v/s Fy-12: (Consolidated)
Total Income up 37.4% to 930.84 Cr from 677.4 Cr
EBIDTA up 59.5% to 224.49 Cr from 140.73 Cr
Net Profit up 45.1% to 112.11 Cr from 77.26 Cr
Tax Rate 36.6% v/s 15%
Reported Full-Year EPS 47.76 v/s 32.92 (Consolidated)
At 01:06 pm on 30/04/2013, stock on BSE trading at Rs. 740/- Down 6%
This is an awesome result from Ajanta, provided you take care of one time 15.75cr tax on previous qtrs. Without which NP would have come to 42cr, which would have a blockbuster result.
Disc: Ajanta is my top holding (18% of portfolio). Had added bunch of Ajanta at 825 odd today only before result. Planning to continue by SIP approach investing in the same in coming months too.
Need to know how long will this one time additional tax burden is going to continue. If it is one time, then it should have been completed in the previous quarter where we have seen substantial increase in taxes. Otherwise the results are excellent.
Hi,
Great results. Needed to understand that athow muchsales growth canthe current capacity handleā¦since new production capacities will come into picture only by 2015 i think.
regards,
