The news articles does not answer the key questions. This is the place where we retail are handicapped. We cant access data and then how do we decide. What are the key questions to be answered?
- What is the production capability - what is key ingredient required, where it has to come from, if yes what is the price, ratio of dependence (inhouse to Chinese), inventory ,etc
- Pricing power and whether they will make profits as the key RM price will shoot up and buyers are Govt. and it is in a crisis.
Going by the above, I don’t think this situation can help IPCA/Zydus to improve its margin and one should invest based on this. Import alert was never there for this hydrosulphate ( again wrong news).
However, it is a good investment in terms of valuation and the technical model I follow. I entered this stock based on that long before this fall. If this situation turns out good, it is bonus. So my conclusion, retail need to work on a combination of fundamentals and price action as their access to data is limited. Just based on good financials, one cannot decide on investment . Business is more important than DCF,etc. Excel can produce any number of values you want. Pl see this link also how PA helped me to enter long back