PI inds has been a compounder since a long time and to expect it to grow too fast is too much. There will be periods of fast growth interspersed with lacklustre periods. That’s the nature of most compounders.
Divis recent issues for me is a non event, but the more relevant issue is when capex will start showing results. My guess its a matter of only a few quarters before it starts showing benefits of capex. Markets also seems to be sensing it and hence stock price is sustaining at high valuations.
Eris is a fully domestically focused company and will have a poor q1 fy 21 due to lockdown. I had a look at it earlier but was worried about sustainability of very high margins due to severe competition in domestic markets. And then corona happened, so it has taken a backseat.
@gautham1 Its said that god moves in mysterious ways. Same is the case with markets. Its futile to try to make sense of market moves. We have a choice of sitting out. And if we want to invest, we have a choice to select good companies and choice to allocate whatever capital we want to. Trying to figure out the reasons for market moves will entail a lot of discussions and no clear answer. So why bother.
Dear Hitesh Bhai @hitesh2710
Request your opinion please.
Currently i am invested in Dr Reddy and Ajanta Pharma for past two months but had no exposure in Divi due to high valuation .
But now getting tempted to buy Divi labs due to correction in recent month for the long term perspective.
Shall i sell both above mentioned shares and invest in Divis Or Should remain invested in both companies as they are also good and infuse fresh money to buy Divis .
Dear @hitesh2710 bhai .
I am already invested in Nestle since a long time and entered in Berger Paints few months back .
I want to increase my exposure more in Nestle , Question is shall i infuse fresh money or was thinking to switch over from Berger to Nestle . Fundamentals of both companies are good but Nestle definitely has an edge and is more like FD and is worthy enough to keep for life time.
In my view , performance of Nestle should be better than Berger this year under Covid situation .
@hitesh2710 ji,
Given that Tractor stocks (Escorts, VST Tiller) and Ancillaries (Swaraj Engines) are showing strength, isn’t it more logical to invest in rural focused NBFCs (M&M Finance, MAS Finance) than those stocks, as ultimately these are the companies which extend loans to the farmers to buy tractors. Or, should we just wait to monitor the impact of moratoriums?
@sujay85
Eicher is no longer a tractor stock. Eicher sold it’s tractor division to TAFE - an unlisted company way back in 2005.
Whatever stock price of Eicher you see, it pertains to its 2 wheer motorcycle Royal Enfield and Commercial vehicles…
Tractor stocks mainly are M & M, Escorts and to some extent VST tillers… yes Swaraj engine supplies engine to tractors.
I am an automobile engineer - I thought to update you
@hitesh2710 Hitesh Sir what is your view on packaging companies. My thinking is lot of loose package selling will move to packaged due to Covid19 situation. People are reluctant to go out and buy loose items so many companies(e.g Dabur) have mentioned in earnings call about launching new packaged items or low volume packaging. Considering the recent move in packaging companies like Uflex,Polyplex this story holds true.
Is it time for these companies(Uflex,Polyplex,Jindal Polyfilms,Huhtamaki ppl) to rerated. Please share your view
A few years back, you predicted the NBFC sector to do well. And you bought a basket of NBFC stocks. Currently, I can see that you have purchased a bunch of pharma companies.
Right now, we see lock—> unlock—> relock as a pattern. This pandemic doesn’t look like it will end soon. Even in 1918, it was there for 2+ years. If intermittent lockdown continues to extend for another 1 or 2 years, we will get used to it. And sectors that are expected to do well in lockdown should continue to do well for a long time horizon. Is this a market where we should follow a top down approach by focusing on sectors instead of individual stocks so that one can ride sectoral waves?
I wont be able to comment on buy this and sell that. That is an individual judgement you will need to make.
@ankit_tripathi, the packaging films companies are all rallying because realisations in bopet and bopp films are improving and raw material prices are benign. But while playing the sector, one has to bear in mind that the whole sector is cyclical and one must not overstay the welcome.
@debesht for weekly, monthly support, resistance etc, you will have to refer to a book on technical analysis or google the terms and learn from there. It will be too long to cover in a post.
Fundamentally, pharma industry seems well placed to ride out the current storm. As you said, one can buy a basket of good companies or if you can dig deep and develop conviction in individual companies, can take concentrated bets to outperform the sector. I prefer the latter as I feel comfortable in analysing pharma companies.
Hitesh, Thank you for your guidance always on the pharma sector, i have held on to all the phrama picks from the last cycle, quite early based on your recos like Ajanta, Alembic, Shilpa etc. I think you sold in between, whereas i held on despite doing some profit booking. Will have to do a detailed study if it was better to switch sectors in 2016. Require your thoughts on it/buy and hold or to keep switching the way the wind blows.
Another query was regarding tne MNC pharma space, Abbot or Pfizer, Abbot’s valuation is high. Pfizer has average return ratios but reasonably valued. Does Pfizer also have blockbuster drugs like Abbot. I believe they are in the lead for a covid vaccine
Most of MNC pharma companies are primarily domestic focussed companies with very little exports presence. I have maintained before also that I am currently not too interested in domestic focussed pharma companies as I expect them to report a poor q1 fy 21 and I am not too sure about q2 fy 21 also. Need to see how things progress going ahead.
In such a backdrop, I dont expect these companies to rally strongly and hence these are not currently even in my tracking list.
Regarding Corona vaccine and one of these MNC companies launching it in India, to me these kind of theories seem too preposterous. First of all we don’t know if and when a vaccine is going to be found. Secondly we dont have any idea who is going to be the first to win the race if at all there is a winner. And finally even if one of the guys finds it, they may or may not launch it through their listed subsidiary. So there are too many ifs and buts attached to this theory of vaccine making a big difference to a company’s fortunes.
Most of these MNC pharma companies have been priced to perfection which leaves little room for disappointing results. And since markets know about poor immediate prospects, most of these have under performed in recent weeks. Even if they don’t correct much, they will remain sideways.
@atul1082 I dont track avanti too closely so not too much idea about its prospects. But in the backdrop of pandemic, there can be fears among the mind of people about contracting the virus through ingestion of shrimps.
Hello hitesh bhai.we are experiencing tough time for economy.But the pe for nifty is 31 and price to book is 2.93.Eventhough price to book looks reasonable why is pe looking very expensive.
Now that you have been on the forum and have shown a quick uptick in learning, I would like you to do one thing. On any company you ask about, I want you to write a brief one para note, say about what its business is, what makes it interesting (could be anything…business model, results, charts, promoters etc) , and anything else u feel is worth mentioning within the confines of a short paragraph. You can start with astec and paushak. Then lets take it forward. Applies to everyone else asking questions on individual companies. That should make things interesting.
@SOHAN, I try to focus on individual companies and don’t try too much to decipher the vagaries of general markets.
Hi Hitesh bhai,
Paushak Ltd is an phosgene chemical play in the spec chem industry with very high entry barriers due to risky hazardous phosgene chemicals and hence very difficult to get a license .
Paushak has a license for the same and only another player i know of having a license for the same is Atul Ltd but business of Atul is diversified while this is pure play Phoshene business with phoshene applications in agrochemical and others. It has stellar mgmt with alembic promoters I.e Amin group . Due to recent tailwinds in agrochemical, do you think it can have higher growth ?
Astec lifesciences is into agrochemical with specialized in triazole related formulations . Another advantage is it has Godrej owning large majority stake . With recent back to back good monsoons, the stock seems a good prospective candidate. However the stock has run up quite a bit and from here on , do you think , it can be a high growth grower from here or would it at best be a compounder ? Another overhang is Godreg agrovet merger which wouldn’t make it a pure play agrochemical play and hence a risk of low returns due to being a merged entity .
Besides which stocks in pharma/spec chem can have high growth prospects like Laurus ?
Hitesh bhai ,
In case of a portfolio, if very few stocks are performing better than many others in terms of earning performance, should those be scaled up as peter lynch says about removing the weeds and watering the trees ? What can be the max allocation to such performers? How do you take scaling up decisions ?
Request your views on the same . Many thanks
