The company is now positioning itself as a specialised injectable player with advanced capabilities. How many of us believe that ?
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I read that there is going to be capex expansion but could not find timeline about its implementation. Can anyone throw some light on this? Has capex already taken place and revenues already now in statements? If not then when will capex come online and how much revenue will it add and when? @praveens
Hi @Aarti you mentioned that revenues will be 400 Crs in 2023. Can you please justify/elaborate on what basis you have arrived at this number?
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@nasbobba Welcome to ValuePickr forum!
Is it good stock for long-term investment?
If you go through this thread from the beginning, many forum members kindly shared their research and views about this company. From these and based on your own research, you may arrive at your own conclusions.
Is there any chance for rebound?
Nobody in this forum wants to (or can) predict pricing trends. We want to mainly focus on just two things: Understanding this companyâs story, and its future prospects.
I have bought these shares at higher levels
What are your views about the company that made you invest at higher levels? We would appreciate if you can share your research or thoughts behind this investment.
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Kwality.xlsx (11.1 KB)
I have done detailed analysis and projection of sales based on past growth and new plants being commissioned. I have attached the same. Sales in FY 23 should be 400 Crs and minimum conservative PAT 50Crs.
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Some pharma grapevine that Kwality Pharma continues to manufacture counterfeit/spurious medicines and exports to Africa and Mid-East. I knew of these types of bribery issues in the past, but you would expect them to learn from these types of transgressions (if proven)
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Outlook for FY 23
The company is lowering its revenue guidance to Rs 300 cr while it expects the EBITDA margins
will increase to be in the range of 24% to 26%. It expects its R&D driven complex injectable
portfolio, new partnerships & product registrations and expansion into new geographies will
drive growth in the coming years.
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even at 300crs topline, and 26% EBIDTA margins EPS will be around 40 and growing. i think 500 is the right price. they just need to increase sales to new geographies.
The biggest redflag for me in this company is the cash flows ,despite earning 115 rs a share ,no amount of money was distributed as dividends and same has been the case for the past many years.
Why do you need capex ,if the revenues are falling.
Disc :no positions just tracking as how the stock pans out in the coming years.
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I wouldâve thought the owner getting arrested for bribing officials (2019) and company continuing to export counterfeit medicines would be a bigger red flag 
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Cash has been used for debt reduction and new capex. Revenues had increased due to price increase during COVID and not volume - thats how they made money to repay loans and fund expansion. With new capacity volumes and sales will increase steadily with new product registration/ geographies.
At EPS of 40 share price of 300 is on lower side currently. But as an when profits increase (and company pays dividend) price should increase.
On the contrary the debt has increased both short and long term.
Price is definitely cheap that is the reason tracking seeing how it pans out for educational purposes no positions.
In the AR of company - âThe company has ploughed back its profits into building two new plants, upgrading existing infrastructure and new product development. It also continues to invest in registering its products across emerging markets at a rapid pace and is in position to get many audit approvals for its existing and new plants in the next two yearsâ.
Sales and profits can jump based on a few new customers/ geographies. New plants have already been put in place. It can be a multibagger⌠will cross 1,000 in a yearâŚ
I had bought some shares today. Quickly got out after reading the report of the MDâs arrest. What has been dinned into us as the first mantra of investing is: quality of management matters.
One canât invest in a company whose MD gets arrested (unless he was falsely implicated), and expect to be treated decently. A chor is a chor.
This is the gist of the report:
Those accused in the FIR are inspector Ankur Bansal, Kwality Pharmaceutical Limited managing director Ramesh Arora, its director Ajay Kumar Arora and chief pharmacist Karunakar Tiwari, besides unknown public servants.
The CBI registered the case following a source information about alleged conspiracy between certain CDSCO officials, working under the Health & Family Welfare Ministry, and owners/representatives of companies manufacturing drugs to manage adverse test results.
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There is one logical criteria for investing in this company. I would invest in it if I would use its medicines for my family members.
I would rather not.
http://www.janaushadhi.gov.in/Data/Kwality-Pharma_13042021.pdf
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Brazil approval.pdf (433.2 KB)
Access to 56 PIC countries⌠can take the company to the next level.
We are pleased to share that the Companys finished dosage form manufacturing facility, Oncology Injectable unit situated at Himachal Pradesh has recently been approved by ANVISA, Brazilian Health Regulatory Authority.The facility is involved in manufacturing, packaging, labeling and testing of dosage forms (sterile injections) for treatment of cancer. After approval from Brazils National Health Surveillance Agency ANVISA, Kwality Pharma now has access to Brazilian Pharmaceutical Market.The approval opens the door for the Company to one of the largest markets and fastest growing economies in the world and other 56 Pics members which include Malaysia,Ukraine, Thailand etc.
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They had committed to it in their presentation as well. Glad they are executing accordingly. Estimating the PAT to be around 40Cr this year.
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I read the whole discussion. The only thing that cries for attention is @Aarti is pushing this company with all efforts. I see a dumping process in progress,when I check the charts. So, its a no-go for me. Following for educational purposes.
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Kwality inv prez aug 2023.pdf (1.0 MB)
Please go through their presentation and you will find my views relevantâŚ
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I have been tracking the company for past year⌠there is significant improvement in their communications which indicates good governance.
They are getting registrations in many developing countries and also Europe. These will gradually translate into sales which can see a huge jump going forward. Current capacity utilisation is low as they added large new plants.
Kwality Pharma is a potential multibagger - 2 to 3x over 2 years.
Discl. - have added more recently.
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Company was planning to go for US FDA approval as well as develop biologics portfolio. Are there any updates on the same?