The Momentum for this stock has again turned Positive. It seems like it has once again commenced it journey. I won’t be surprised to see it test 1000 after it crosses 940. If it breaks both the above resistance, then we are looking for a new high beyond 1000.
Lets watch 940 from here on.
Ayush,
For expansion, the management maintains that Savli unit (for Emerging Markets) should be operational FY14-15. Given the fac that they have low CWIP, can we assume that some work has aleady been done. For Dahej, even I feel they might take more time as this unit is for regulated markets and will require USFDA approval (but they might not require huge capacities for US markets very soon).I like the way they have reduced debt amidst all this expansion (kind of indication of cash flows they are expecting this fiscal…?)
Please share your views.
As there hasn’t been major addition to gross block and Capital work inprogress, I think new plants will take sometime. Yes, cash flows have been excellent
soon).I
Few questions popped up my mind, unfortuately AR does not provide much details.
How much sales can the current capacity serve for Ajanta. Would they facebottleneck in capacities to support growth in next 2 years?
Any chancethat they can outsourcethe production atleast for sales to EMs ?
Are capacities transferrable from low value addition to high value addition products, so that they can atleast achieve value and profit growth of notvolumegrowth.
I know most are difficult to answer considering they hardly provide any details in AR. But would be great if someonecan recallfrom any management interviews from past.
This is what I had written on Monday. Today the stock crossed 1009 again. Great going. Strong stocks should always be bought on dips. Ajanta did copy books style as per the charts.
Looks like there is some movement on release of pledged shares of this company. Based on the information filed by the company on NSE yesterday, it appears that outstanding pledged shares have reduced from 4.7 % of total shareholding of Ajanta at31st March2013to 3.32% on 30th June. Though the whole information is given in a very round about manner and someone from finance background can interpret it better.
Shareholding pattern for June quarter is already out on BSE and it confirms that Pledged shares have reduced to 3.32%.
Bonus in the offing. stock jumps
Ajanta Pharma Ltd has informed BSE that a Meeting of the Board of Directors of the Company will be held on July 29, 2013: 1). To consider and approve, inter alia, the Unaudited Financial Results for the first quarter ended June 30, 2013.2. To consider Bonus issue of shares.Source : BSE
Seems like Ajanta has heard me loud and clear. The stock is in a new uptrend and making new highs. With the bonus announcement, one can look at higher levels. All the short term momentum indicators are in positive territory. Although on the RSI it is at over bought level there is more scope for new highs as the CCI is just beginning to pick up. I won’t be surprised if it crosses 1200 levels.
From the time it was first discussed exactly 2.5 years back with price of Rs 96 (split adjusted) to CMP of Rs 1158, it has been an amazing **12-bagger **in a span of 30 months.
Who were the ones who were able to ride this 12-bagger to it’s entirety in this 30-month span ? Would like to hear your thought processes and how you held on to your positions without a sell.
Revisiting the initial argument tenants, that valuation attractiveness is gone now, it is expensive on the P/E side now. Also on the conviction front, I think the high growth is not a given anymore particularly on the back of scorching growth of last few years and higher base. How do you ride it from here on ?
January 17, 2011
Ajanta pharma)-- 192, ** On 9. **
Thanks Rudra for initiating this. I have been holding it from 125 (adjusted) level and has been a great journey from thereon. Started with a small investment and kept adding at different levels 200, 300, 380 etc. In fact it has been saviour of my equity invesments and 75% contributor to the overall returns of my portfolio. I did sell it multiple times but bought same/ more quantity later , usually at lower price. So not a bad history for me from trading perspective as well and cant deny falling in love with the stock.
But practically speaking, my thoughts are like this-
Valuation- Its surely a more discovered stock trading at 25 trailing now. PE expansion may not be left, but itcan most probably maintain the 22-25 level unlesseven ifstops delivering on growth for 1 year or so.Current PE looks high only as compared to its own past valuation not relative to industry.
Growth- There has been any evidence for slowdown in growth. The sales and PBT have actually grown faster in last 2 quarters.Also a major boost in earningswill come up due to 15% odd depreciation in INR in last few months. US sales can only add to its growth and their are sufficient reasons to believe that it has strong hold on its existing markets since it has shown sharp sales/margin growth compared to any other company.
Selling a stock due to sharp boost in recent past may turn out to be smart idea for many, but I would choose to hold. Have no conviction left for trading and it has been difficult to sell it.
**12-bagger **in
Eagerly waiting to hear valuepickr’s amazing ride- Ajanta Pharma. Congrats 
What a journey! I remember reading hitbhai’s original ajanta recommendation at 180 (unadjusted) along with aries agro. Didn’t know head nor tail of pharma then, so went with aries (arghh!!) Finally got into Ajanta at 360 and its been an amazing ride. This was bought simply due to hitbhai’s reco and I thank him for it.
Its funded a lot of my other purchases and still continues to do so (sold some in last few days to buy Yes bank).
Allah meherban to gadha pehelwan!
I came across this stock when it was trading around 100(Split adjusted). Event though I liked the numbers of the company, I had less faith in its ability. I did not know about valuepickrthen which also aided in missing on the good research available here. Hence, I decided to trade rather than invest in this company which yielded very poor results for me. Company moved from 100 to 150 and I could make only 5% in this counter.I bought and soldat all possible wrong times. Only when the company reached 175, I realized that even though the company’s share price is volatile, the company is excellent fundamentally. Since then, I started building a position in the company and by the time share moved to 210, it was more than 10% of my portfolio. My faith was little bit shaken, when the share prices fell from 400 to 300 and sold approx. 10% of existing position at 300, only to pick that position up at 400 again (confirmation of poor trading skills). Currently, the stock stands at 37% of my portfolio and it is at 6 times my original investment positionof 175 and more than 5 times the average purchase price of 220.
Valuation wise, the most important thing would be the results that this company posts going forward. Till now, the company has shown 48% average y-o-y growth for past 3 years. If the company continues to do that then this could still fetch quite some money from here as well.
Started buying around 150 levels (split adjusted), didn’t have enough conviction then, but it built up and so did my positions. My average price is around 250 levels (split adjusted). Wish I had discovered the site earlier, conviction would have built up quicker and % capital allocated would have been even higher.
Currently it forms significant part of my portfolio.
I don’t think its a ‘discovered’ stock,still.One would call a co./stock discovered if Institutions are holding much more than they were,previously.I don’t see that with Ajanta.Pretty low FII holding & today’s move can be purely attributed to the bonus declaration.The valuations,however,are stretched.But the bonus news should keep the upmove intact till 29th July.I was a very late entrant.Bought in the recent correction to sub 800 levels recently.
Congrats to ValuePickr team & the guys who have made a good deal of money,here 
Q1/Fy 13-14 Results out…
Total Income up 25.8% to 218.94 Cr from 174.05 Cr.
EBIDTA up 37.7% to 51.09 Cr from 37.09 Cr.
Net Profit up 66.2% to 32.54 Cr from 19.58 Cr.
EBIDTA margin is 23.3% v/s 27.7% (MQ-13) and 21.3% (JQ-12)
NET Profit margin is 14.9% v/s 10.9% (MQ-13) and 11.3% (JQ-12)
Total Raw material costs as a %ge to Income is 34.1% v/s 35.8% (MQ-13) and 37.4% (JQ-12)
Employee costs to Income is 15.5% v/s 13.8% (MQ-13) and 14.7% (JQ-12)
Other expenses to Income is 27.2% v/s 22.7% (MQ-13) and 26.5% (JQ-12)
Financial costs to EBIT is 3.8% v/s 8.9% (MQ-13) and 17.8% (JQ-12)
Tax Rate 31.8% v/s 55.1% (MQ-13) and 15.3% (JQ-12)
Forex gain v/s forex loss and
Reduction in financial costs helped net profits.
EPS 13.86 v/s 8.34
Recorded TTM (sum of 4 quartr) diluted EPS: Rs. 48.59
At 11:00 pm on 29/07/2013, stock on BSE trading at Rs. 983/- Down 4%
Deepak,
You are always there to update us on the results. Thank you for your contribution. Further the Board of Directors have recommended a bonus of 1 share for every 2 shares held.
Tony
Q1/Fy 13-14 Results out…
48.59 983/- Down 4%
Interesting thing to note is that company has 6 odd Rs of hidden EPS in the form of one time taxation in the 4th quarter. If we add that back we end with close to 55 Rs. TTM EPS and company is available at 18x trailing. The other important point is that June quarter was the last quarter with lower tax payout. Going forward all the gains of aweaker rupee will directly show in the bottom line enhancement.
P.S. - Invested and my opinion may be biased
thanks Deepak,
kind of getting habit-ed to your concise updates
Rgds
