Just putting some more details as to go with the guidelines of having a 3-4 para thesis.
Market Cap of Co = 250-260 cr.
Land Value = 150-200 cr. as they sold 30% of land at 76 cr - Link to that - http://www.vccircle.com/news/real-estate/2013/06/06/rpg-life-sciences-sells-leasehold-rights-land-navi-mumbai-maruti-suzuki
The sale proceeds were used to repay debt.
Good possibility that they may hive of land in next couple of years.
The New CEO - http://www.business-standard.com/article/pti-stories/rpg-life-sciences-appoints-c-t-renganathan-as-its-md-115010200196_1.html
He was earlier With Glaxo Pharma.
Continuous Insider buying by Harsh Goenka - http://www.bseindia.com/stock-share-price/stockreach_insidertrade.aspx?scripcode=532983&expandable=2
Increase in stake by 4% in last qtr and was at 53-56% is now 66% of shareholding.
The last qtr results show a marked improvement with 4.5 cr pat and 66 cr sales.
They had received a non compliance notice from US FDA which takes 2 yrs for a retry. Not expecting it to happen but there is scope for luck in this part.
So at 250 cr mkt cap and 250 cr sales and turning around with last qtr pat of 4 cr gives shows promise. Also the land holding and that too being sold and used to repay debt shows further land sale money may be put to proper use.
Now coming to the governance and performance part.
RPG group is now with Harsh Goenka.
Ananth Goenka his son has taken charge at Ceat.
The change in Ceat was seen in last 3-4 years. Earlier the group increased holdings from 45-47 % to 57% and a recent QIP has reduced it to 50% but in the same span alongwith the tyre sector turning the stock has gone up 10 times alongwith performance and re-rating.
The company has been around for 3 decades and no major growth !!
So my bet is the old mindset is changing and management is getting professional.
At a valuation of 200-250 cr with land worth 150-200 cr gives me lot of comfort alongwith results picking up.
Although i do not understand the Pharma business this is a bet on management changing stance and buying it at a valuation where my capital loss risk is not huge and am ready to wait patiently as well as build up on the way up or even exit on review after 2-4 qtrs.
Would love to hear views from Pharma people. As per a little feedback they have started hiring more aggressively.
Again a disclosure - Have a decent exposure to the stock from 110/150. So my views will be highly biased take it a with a ton of salt