Those who had missed the Ajanta bus earlier, do not rush into buying this one now. You cannot fool the market that easily …
Hi Shankar,
Can you please give your rationals behind the below statement. I feel at CMP, ajanta is a decent buy. I feel it can give ~30% return in one year time frame.
Regards,
-Subash
Hi Subash,
Time and again I have seen that when a stock which was zooming falls 10 -15% , people who missed it ealier and cursed their fates jump in, thinking this is their best chance . But then the stock falls further, atleast in the short term. Markets never gives such easy buying oppurtunites, IMHO. Even I feel Ajantawill give30% returns from here, but there could be better entry points .
When Ajanta zoomed from 400 to 900, many sold out thinkingthe rise was to fast. And then it came to 780 fora day and majority didn’t have strenghth in their stomachs to buy, except maybe our dear Tony :). And then it zoomed to 1150, leaving all of us even more disgruntled. And now its inviting us tobuy it, alluring us with its sexiness 
,which may atleast in the near termbe false.
Those who had missed the Ajanta bus earlier, do not rush into buying this one now. You cannot fool the market that easily …
Nice description, shankar 
Ajanta has always surprised me on the upside and now on the downside.
Hi Shankar
I think you have illustrated the price movements quite well. Obviously, Ajanta has been pretty wierd and has made every greedy person ( which means absolutely everyone here ) unhappy for one or the other reason at some point. For e.g. I was disappointed to see it at 1170 since I havent added any after 400 , and now I am disapponted as I couldnt book profits at higher levels. But this is always going to be the case for any volatile stock.
However, if I look into current market opportunities, Ajanta still seems to be among fewcompanies that are still growing at brisk pace and is decently valued. It has been reporting atleast 5 times Q1 EPS annually for many years. If it does so this time, It is valued at 900/ 70 = 13 times forward PE. Growth plans are in Pace, INR depreciation will help plus even the best companies seem to be underperforming. Ajanta, Astral, Kaveri are major opportunites with almost ‘assured’ growth in next few years. How much is debatable in all, butI think eachdecine is surely an opportunity.
Disc: Added more Ajanta today.
Last time too,Ajanta had fallen after a long consolidation,from a high of 1000+ to 780 odd levels(22% fall)The rationale for the upmove at that time was mostly promoter buying.This time it went all the way to 1180,on the back of bonus issue declaration & to an extent,expectation of good Q1 numbers.So by the same logic,the fall should stabilise at around 850-870(at the most) Also,the EPS of 48.6 means the stock is now trading at less than 20x TTM,thats pretty decent for a co. growing at 30%+.I think we should see 1200+ in FY14.
Did anyone attend this year’s AGM?
Hi Shankarnarayan,
You rightly mentioned that I bought the stock at 780 levels. Recently sold it on the way up from 1110 to 1160 levels. As usual, waiting patiently for the stock to move lower. That is what happened with Ajanta. After studying the charts carefully, I covered my sales from 920 to 880 levels. To do this one should know the stock well, then there will be no fear to buy it on declines.
BUY FEAR, SELL CONFIDENCE
Tony
** Markets IMHO. ** Ajantawill give30% thinkingthe fora 
. tobuy it, 
,which termbe false.
Hi Shankar,
Can you please give your rationals behind the below statement. I feel at CMP, ajanta is a decent buy. I feel it can give ~30% return in one year time frame.
Regards,
-Subash
There is some development regarding Ajanta.They had revoked two composition patents of Allergan Inc. in 2011.The news is that they have been successful.
Any ValuePickr who knows more about this can explain the effects of this.The data is available on the BSE website.
I think they had a favourable judgement, thats all. They were selling particular product which was later patented by someone else and Ajanta has revoked it. Since they were already selling the ophthalmology product, this favorable verdict will let them continue to do so.
Regarding the impact, it needs to be seen if these products are significant contributor to sales or not. Since the ophthalmology market is around 800 cr and Ajanta ranks 7, my guess is these products wont be a major contributor, so impact wont be much in terms of financials going forward.
Request anyone with better understanding of the laws and medicine to take through the scenario
Yes Utkarsh,those WERE the questions.But seeing that no Senior has responded,I guess the impact of this news won’t be substantial on AjP.'s earnings.
Don’t know about the financial impact but it seems to be a very good development for Ajanta…as taking on a huge MNC like Allergan wouldn’t have been easy. It also highlights their R&D capabilities.
Ayush
I
Guys,
Ajanta Pharma Management Q&A scheduled on 22nd.
We understand this business/company well. Lets focus on the 5-6 questions that we want to specifically get addressed this time round. This is the 3rd Q&A with Ajanta.
Please send in your top-of mind questions, asap. Incase you have broader/strategic questions feel free to bung them in too. But let’s focus on real specifics this time.
Cheers
Donald
You have filed for 14 ANDAs,12 are pending approval.Have you got any more approvals? Is there a delay in approvals? If yes,then what could be the reasons? Which markets are you targetting in the US? Does the recent hike in filing charges affect the co.'s expenses in any substantial way? How much does the revoking of Allergan patents mean to the company?
Hope these are not too crude.
Cheers.
Thanks Sagar.
We want top-of-mind queries just in the form/shape you have put in. Its our job as interviewers to pose things in a more structured way for easy/logical questioning flow and better understandability of readers.
Lot of companies are facing the FDA heat. Any risk to Ajanta?
I don’t think you can ask this directly, but possibly you can ask subtly about the preparedness for FDA checks. What kind of controls they have in place.
Some questions I would have wanted to ask
1). Sidenfil - whats the total market in europe ( where approvals have been obtained) and how much market share you expect to gain in 2-3 years. Any major drugs in pipeline for Europe?
2). Have you done any provisions in the books forthis case http://www.monitor.co.ug/News/National/Government-sued-for-Shs24b-drugs/-/688334/1937142/-/m1788e/-/index.html
3). Do you see anymajorimpact due in long term due to the new vaccine under development for Malaria http://allafrica.com/stories/201308150071.html
4). What additional growth can come with the existing capacities. How long will it take when you hit capacity bottleneck in growth with current plants.Dueyou plan tooutsource if required?
5). What’s your core competency due to which you have been successful in growing fast in emerging markets. Considering high profit margin and high growth, why is competition not chasing you? ( may be need to frame that better)
6). U.S. Market- potential for approved ANDAs and the once under approval. What % of sales would developed market contibute in next 5 years.
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Thanks Akbar - that is a good question to ask. And I can ask such business questions starightaway - no diplomacy needed there:). Increased FDA scrutiny/non-compliance fallout is a business risk, and how prepared/or unprepared are they or how confident/ or not confident are they in facing unannounced scrutiny- that is the real question, right?
Thanks Gaurav for adding value. Good generic questions to aid better understanding overall. Q4-6 however are more or less covered in earlier Management Q&As. You may like to go thru these in detail - and refine your questioning? Please have a re-look.
Thanks Donald.You areright,5& 6are too generic and no answers would probably help in any analysis, had just written down straight from heart :).
But they havent ever mentioned about current capacitiesexcept the one where they said 1000 Crores sales / yr ( dont remember where I have seen that). But then with exchange movements and change in product profile, that can change. I think its very important indicator or what we should expect from Ajanta in short term.
Got my answers from Management Q&A section, didnt know that part of this website, ignore my last message.