Gujarat Themis Biosyn Ltd - Bulk Drugs growth momentum

I would venture to say that there is almost no practical change in the operations of the company. The ‘business model’ previously was job-working for Lupin etc. to which they were tied because of BIFR commitments. This changed to effectively running a ‘normal’ business this year approx.

Compare this to a bakery where you can only bill ‘conversion-charges’, you are ‘given’ the dough raw-material, you just run the ovens and give ‘back’ the bread to the company (Lupin etc.). Now, you buy the RM yourself and sell the bread to the company (Lupin(?) etc.).

Hence the company suddenly looked much better in a blink!
Same factory, only the accounts change.

No comments on the inventory.

Disc: not invested anymore, decent gains, little disclosure was off-putting, they keep undertaking shutdowns when entire pharma seems to be over-working! Does fermentation biz give a decent moat? Was the smallest part of the overall PF.

3 Likes

The rating is being withdrawn on account of request received from the company and NOC received from lthe banker.

1 Like

In my experience, “issuer not co-operating” often means the company does not need external funding, which is not surprising given that GTBL is cash-rich. Low PE, cash-rich stock with high promoter holding, and capacity expansion plans—excellent opportunity for the long-term investor who favors Peter Lynch’s “follow the cash” maxim.

Disclosure: Around 7.5% of my portfolio is in his stock.

3 Likes

I have trimmed my position in the stock aggressively…its really hard to know what lies ahead in the near term …how badly q4 will be affected …And also none of the numbers given by them are working so almost impossible to get in contact …were you able to get in touch ? What makes u so bullish right now ?

2 Likes

I have made a few assumptions:

  • Assumption 1: They would have inventory to maintain their revenues in Q4 since it is a planned shutdown of as long as 60 days. Upgradation of the plant is good news in the longer term.
  • Assumption 2: The high operating margin of nearly 50% is sustainable as has been the case in Q1 and Q2.
  • Assumption 3: They are working on capacity expansion and will be completed soon, since it has been a while since they got EC for expansion.

I may be wrong and there appears to be no way to verify these assumptions. However, the excellent financial metrics, low price, and past performance are compelling enough to keep invested even if there are temporary issues.

1 Like

Decent results considering the 6-week long shutdown in Q4. The company maintained its revenue at around Rs 23cr (24cr in the previous quarter) and PAT was Rs 5.8cr (7.5cr in the previous quarter). The company had around Rs 30cr PAT in FY21, which means the PE ratio is around 12 at CMP around Rs 250 (market cap Rs 360cr).

1 Like

Anyone familiar with elliot wave here ? Can you check if this stock is starting its 3rd wave?

The stock has been rallying from few days. Is there any reason for that or just Mr. Market short term behavior?

1 Like

Well from a technical perspective it has had a 29 year breakout …the breakout level was 234 if I remember correctly …and now after they have upgraded their plant without any big disruptions in the business I think the market feels it can continue its profitable growth .
Disclosure : added back 70% of my previous quantity at 280 levels

1 Like

The promoters seem to have acquired the stake held by the south korean pharma giant Yuhan corporation

2 Likes

I have worked on technicals including Elliot wave for a very long time and came to the conclusion that technicals are not consistent. Since I come with programming background implemented reinforced learning, no use. If you have a strong math background and hold a Ph.D you can imitate Jim Simons and crack the stock market code, if you can’t, deep fundamental analysis is your best choice.

3 Likes

It would nice if you may add more information to your chart.

First investor presentation released by the company

4 Likes

image

image

image

image

3 Likes

Company is going to declare interim dividend

1 Like

Good results with dividend of 7 rupees announced …company is conducting a con call tomorrow at 1.30 pm

2 Likes

Following the first investor presentation a few weeks back, the company is conducting concall for the first time. Annualising the results of the last two quarters, the current PE is around 15-16, which is low considering the excellent financial ratios and expansion plans.

Disclosure: Invested from lower levels.

If any one had attended the concall please mention what was discussed

Q2FY22 Earnings call:

1 Like

Wow 200 crores capex being planned …they expect roi of 50 crores every year if im not mistaken(please correct me if I am) …capex would be coming online from end of 2023 …!! Wasn’t really clear what their plans for growth would be in the meanwhile …if anyone knows could you please mention it

1 Like