hi hitesh,
hate to ask stock specific query. you can ignore this if you want to. if you look at pharma, almost every stock has gone up quite a lot over the last year. but torrent pharma is still trading at a pe of 28. ( this too has gone up). to me this looks to be one of those very few quality stocks (not just in pharma but across all sectors) still available at a decent valuation with limited downside. or am i missing something here?.
@atul, Unichem seems to be forming a flag pattern with target of 340-50. Actually it broke out of the flag pattern today itself. technically seems a good buy on declines. But fundamentally I cant find anything exciting happening so its still in watchlist.
gautam,
about torrent assigning a valuation is a tricky exercise. Mainly bcos of abilify equation. How much abilify contributes to overall fy 16 and then finding out what the rest of the business or the base business has done would be possible only after the data regarding abilify total contribution would come out. But I am invested in it since before q1 results with the following logic
It was common knowledge that abilify would contribute handsomely to q1 and q2 results of torrent. It was a big molecule size wise with minimal initial competition. So price erosion would be low and hence profit impact would be high.
The acquisition of elder portfolio would propel domestic growth. That seems to be playing out.
Co is the biggest Indian co in the Brazilian and German markets.
Company is in top 3 position in 10 of its marketed products in US markets. And it has its own front end marketing set up in US.
With Dahej SEZ nearing completion and acquisition of elder products behind it, capex going forward is likely to be low. that would enhance cash flows.
Debt was around 2400 crores and if one were to account for cash and equivalents then net debt is around 1600 crores which for a company of its size seems okay.
High promoter holding and stated div payout policy.
I expect the base business x abilify to grow around 15-20% and fy 17 eps in the vicinity of 60-70 and based on that stock seemed attractive.Various brokerage houses have very different figures for fy 16 and 17 earnings estimates.
And at that point of time downsides from those levels of 1330-50 seemed low. So bet on it was aggressive. Personally I feel that there are a lot of positive triggers that could play out.
disc: invested. this is not a recommendation and everyone is urged to do their own diligence and take action accordingly.
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Hilesh bhai thanks for ur responseā¦u r from Gujaratā¦which placeā¦Regards
Hi Hitesh
Do you track Eicher motors ? The growth story is continuing but am scared of its high PE. How to play this kind of stories. Please share your thoughts.
Hi Hitesh !
Aurobindo seems to be catching up now. As per my review of peers in screener.in (now the peer comparison feature is not available there), for similar sales and profits, it seems to be undervalued, even after running up almost 10 times. Its P/E is about 15 compared to peers having above 30. Do you track it and whats your opinion?
@mukesh, I am based in baroda.
@pavan I dont track eicher too closely.
@kailas, aurobindo has been a big winner in past 2-3 years. But comparing only PE without looking at other parameters like debt, return ratios, business quality etc is of no use. Try to read the threads on art of valuation and other business quality thread so that u can get a better idea what determines PE ratios given by market to different companies.
It could be because of its recent stock split / bonus.
Hi Hiteshbhai
I am also based at Baroda. Would be great to meet you and learn from you.
If you are comfortable can you please share your address.
regards
chirag jain
Thanks for reply!
And I agree about art of valuation!
But here are the ratios which are almost comparable to others.
Sales growth: 34.43%
Sales growth 3Years: 37.84%
Market Cap to Sales: 1.92
Profit growth: 1.47%
Profit growth 3Years: 104.14%
Debt to equity: 0.86
Return on equity: 35.64%
Average return on equity 3Years: 30.75%
Dividend Payout: 8.33%
Return on capital employed: 29.45%
ROCE3yr avg: 25.47%
On business quality, I donāt have any details, but higher interest costs was an issue until 2012-2013. This seems to be okay as of now. I could not find any thread on it here, so asked you being a close tracker of pharma companies.
Thanks !
Aurobindo thread
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Thanks for the link Vijay!
Hi again !!
Sorry for the confusion. Screener.in doesnāt account for recent bonus 1:1 on 21st July. Hence P/E of Aurobindo shows at 14.99. Actual, its double = 30, which is at par with other players.
But good thing is that Aurobindo has a big pipeline of ANDAs and we are getting news of new drug approval almost every few days.
Thanks!
thanks a lot hitesh for such a detailed response. thats very useful
Hitesh Sir, can you comment on the recent results of Page Industries? Do you think the topline as well as bottomline growth of 16% as compared to June 2014 quarter and also around 16% growth as compared to previous quarter is an aberration. Also, I noticed that COGS as compared to previous quarter has not dropped, indicating the cotton price drop has either not spilled or Page is not a big beneficiary. Sir, can you comment in Page thread if possible. Thanks
Dear Hitesh Sir.
Can you please comment on my portfolio
Page results have been lacklustre and below expectations. But bcos of stellar past track record markets would take a couple of quarters before taking a call rather than show any knee jerk reactions.
I feel over the whole year things might even out and co might show good growth.
The theory of low cost cotton inventory doesnt yet seem to be playing out. Next quarter needs to be watched for that on how things pan out.
Thanks Hilesh Bhaiā¦I M From Ahmedabadā¦sir you are practicing as dermatologistā¦I m from pharma industry.
Regards
Dear Hiteshbhai:
What is your outlook on Indian hume pipes?
Do you think the water/ waste/ land story may take longer ( lesser gross margins) to pan out.
Is it better to trade in this stock than be a longer term holder?
Are you holding this stocks .
Thanks
mukesh, nice to know u are from ahd.
ritul,
I used to own indian hume earlier as a techno funda bet but since the returns from 300 to 420 came too quickly i booked out. The real estate contribution I feel is still a few quarters away.
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Hitesh,
Sandesh Ltd has shown good eps growth in last 2 quarters. Operating income is also showing positive growth YoY. Do you have any insights in this, given Sandesh is from Gujarat?