Bulk drugs manufacturers mainly cater to the needs of pharma companies which generate prescriptions from doctors. they themselves dont generate doctor’s prescription.
Companies like sun, torrent, unichem, fdc, ajanta etc get most of their business from doctor’s prescription.
Companies like aurobindo, orchid, smruthi organics, etc are mainly bulk drug suppliers. The percentage of revenues from doctors prescription is very low in these companies.
I think they were into debt management for companies. There was some scandal/rumour of scandal and stock price had taken a big hit. dont know much about it.
You can start a thread about it if its interesting. Or find a thread it if exists and continue with it.
I am very surprised that a dividend yield of 2.5%, sale of SEZ on trackand falling rupee have not protected the downside. The stock just keeps slipping. I started buying at 175 and slowly added at lower levels. I plan to add more but getting jittery now.
I was lucky to make some quick money earlier in Can fin (Bought at 140, sold at 161 the day CNBC guy said it will be a multibagger) and Kaveri (bought at 1400 and sold at 1600) and then converted it to Unichem.
regarding hawkins, if u see historical figures for annual sales on screener.in, then we could expect the company to grow at atleast 15%… This is my premise.
Now with the company expected to have a trouble free (fingers crossed) full year of operations, I expect some amount of operating leverage to come into play. i.e fixed costs remaining same and higher sales leads to improved npm.
So if sales grows by 15% in fy 14, (fy 13 was 420 crores) we get sales of around 485 crores. On that if we expect an npm of 10.5-11% we get net profit figure of around 50-55 crores and apply a PE of 30 then that gives a target market cap of 1500-1650 crores. Current market cap is around 1135 crores. That gives a good 40-50% upside.
the whole theory rests on
1). company having a trouble free year
2). demand sustaining to provide atleast 15% sales growth
3). Net profit margin expanding to 10.5-11 %
a new ceo has been put in place and hopefully he will have better focus on profitability than brahma vasudeva.
I feel correction is already meaningful. Maybe some more to go. Currently not too much cash. In case of stock specific preferences might swith between stocks.
Unichem – never thought about price targets as such but could be around 300 or so.