Awesome Q&A, just making my first entry into Ajanta.
thanks donald for the ajanta management q & a.
Ajanta looks like the consistent 20-25% grower with the possibility of higher growth and positive surprises thrown inā¦ At least next couple of years looks good. After that how it does on a much higher base needs to be seenā¦
US market growth remains a thing to be observed. Another thing to be seen is how they handle themselves post full expansion is finished.
Valuationwise, I think they can do eps figures of 60-65 for fy 14 and based on that anything close to 700 or below it looks attractive to add ajanta in a staggered manner ------mainly looking at the market moodā¦
For those not bothered about short term gyrations and seeing stock at 10% below their purchase price without any tension, it makes sense to buy at around cmp of 750 odd also.
Thanks a lot Donald.Awesome work 
We are very fortunate to have such a selfless,hardworking person as you.
The Management Q&A answers everythingā¦personally,happy to know that things are still good with Allergan.My doubts about the management have reduced exponentially.
This again looks like a conservative management which is doing its job very well & sticking to its strengths.Good chance of positive surprise if we work with a 20% growth as base.
Hitesh bhaiās update on Ajanta Pharma,the stock is also encouraging
thanku donald paaji
Hi Donald,
Many thanks for reproducing the management interaction. I still have couple of queries:
1). When they say they use simple currency forwards for hedging, do they use quarterly, annual or more long term forwards? Did they mention at what rate have they hedged the exposure for this year?
2). They have mentioned that ebitda margins are sustainable at 22% currently? Did they mentioned any reasons for this lowering of margins from current levels?
This shows a great team work and Donald being team leader leading the right way. I cannot thank enough for all those wonderful picks valuepickr has thrown light on.
After re reading the thread of Ajanta i see how the story has unfolded and after this Q&A i see that it has some good future in prospects.
I recently added some around 750,will keep adding if it falls further in this market.
Thanks again for this great effort.This encourage us to do more leg work for the stories we believe in.
Donald ā¦as usual great input ā¦ balanced Management with feet on floor seems to be as good compounding story for several years with occassional surprises on upside.
Thanks Donald and Teamā¦
I notice a distinct shift in the outlook towards the US market.
In last yearās Q&A it was mentioned that US is just another marketā¦ Small set-upā¦ Will take timeā¦ focus on ROW.
This yearā¦ This is an important market for us.
A big change.
1). I believe they hedge for about 6 months. But usually while hedging, they reduce the value of foreign currency loan/wc from the debtors while doing the hedge.
2). The lower margin by just 1-2% has been accounted for being conservative. Also so much of fluctuation in margin is pretty normal, IMHO.
Ayush
1).
Thanks Ayush & Donald on thw wonderful work on Ajanta & Avanti.
When r u meeting Astral Management ? Hv u seen my queries on Astral?
Hi,
If one reads the annual reports and financials of the company, there are two things to observe:
1. Improvement in RoCE and RoE over the past 3 years on consolidated as well as standalone basis:
| Rs. Crore |
2011 | 2012 | 2013 |
| PBDIT | 91.76 | 134.28 | 214.69 |
| Depreciation | 23.79 | 30.68 | 32.70 |
| PBIT | 67.97 | 103.60 | 181.99 |
| Average Capital Employed | 376.52 | 403.95 | 441.85 |
| RoCE (PBIT/Total Capital) | 18.05% | 25.65% | 41.19% |
| PAT | 46.45 | 66.49 | 101.12 |
| Average Equity | 195.73 | 243.70 | 314.06 |
| ROE | 23.73% | 27.28% | 32.20% |
What is quite impressive is the significant improvement in RoCE primarily on account of sharp jump in profits, increase in outsourcing and improvement in working capital requirements.
2. How will the company benefit from the depreciation on INR? I think we can see some upward revision in the EPS in FY14 and FY15 on account of depreciation of rupee. The table below throws some light on unhedged receivables and payables of the company:
Consolidated
| As on March 31 | 2013 |
| Receivables | 150.47 |
| Unhedged Receivables | 117.8 |
| Payables | 131.71 |
| Unhedged Payables | 105.05 |
|
Standalone: |
FY14 |
| FOB Value of Exports | 506.67 |
| CIF Value of Imports (excl. capital goods) | 39.3 |
| Expenditure in Foreign Currency | 41.08 |
| Net Exports | 426.29 |
Being a net exporter, we can see some upside on EBITDA margins of the company going forward.
Regards,
Ankit
http://www.bseindia.com/xml-data/corpfiling/AttachLive/Ajanta_Pharma_Ltd_060913_SAST.pdf
http://www.bseindia.com/xml-data/corpfiling/AttachLive/Ajanta_Pharma_Ltd_050913_SAST.pdf
Promoterstarted buying again.
The following review on Glassdoor among others is very interesting. What a testimony! An investorās delight
(http://www.glassdoor.com/Reviews/Ajanta-Pharma-Reviews-E461188.htm)
"Pros a It is the one of the leading company and fast growing company in india .
Cons a No gifts are provided to head quaters to convert doctors .
Advice to Senior Management a Management should reconise the growing head quater and provide them with exiting insentives ."
Some more pledging got revoked. Now pledging stands at around 2.7%.
Ajanta Pharma Ltd. Succeeded In Revoking Two Composition Patents Of Allergan Inc.
Ajanta Pharma Ltd. filed a revocation application against Allerganās patents viz. IN 212695 and IN 219504 granted by the Kolkata Patent Office in December 2007 and May 2008 respectively. Both the patents were on drugs to cure Ocular Hypertension (Glaucoma) and were applied for a revocation on the grounds of obviousness, not an invention, not patentable, insufficiency and non-compliance of Section 8 of the Indian Patents (Amendment) Act, 2005.
It was held by the IPAB that the application was not time barred. The right to revoke patent any time after the grant of patent under Section 64 of the Act cannot be extinguished by applying limitation of three years under Article 137 of the Limitation Act.
The IPAB rightly revoked both these patents on grounds of Obviousness and Breach of Section 8 of Indian Patents (Amendment) Act, 2005, as put forward by Ajanta Pharma Ltd.
If everyone is rushing to buyā¦is it time to sell? Just thinking āinvertedā. Views invited from fellow boarders.
At the valuation of 22-25 pe range, I would prefer buying IPCA as compared to ajanta pharma. I also feel that Alembic pharma at a pe of 15-16 has higher return potential with lesser risk as compared to ajanta at pe of 22.
I am selling by pre-bonus stocks (there by making nominal loss, and 15% flat STCG gain of those short term nominal loss).
Disc: I have still 13% of pf in Ajanta pharma.
Regards,
-Subash
Though I agree with all you have said,but Ajanta does run up a bit before results.Last quarter too,it went all the way to 24-25X TTM,before correcting 40%.So,though it may seem irrational,Ajanta may still cross 800 soon.Regarding Alembic P.,its surprising that its being ignored(which is good for us 
) even as Marksans,Shasun,Dishman kind of stocks have started going up.I feel it may give Lupin type of a return after Q2.Its been dormant for way too long now.
Have you guys received the Bonus shares?
I got mine.