- It is a pharma company owned by the promoter of
Strides Arcolab Ltd ( STAR), involved in CRAMS/API space in human and animal health
- Largest producer of Vetenary Anthelmintic APIs, has strong alliance with Orffa BV, Supplies anti-malarial API’s to CIPLA.
- Post takeover by Stride Acrolab promoters, it has grown 5 times (to turnover of 355 Cr) in last 5 years (via organic and inorganic route).
- **Big time expansion **: Completed expansion of Mangalore unit on human API’s; Speciality chemical divison expansion will be done by second half this FY; Entering into Penems, Penicillin, Oncology, Phyto Pharma, Herbal extract through capex of 164 Cr.USFDA standard facility at Panoli will start contributing from next FY; 1st phase of Penem project will be complete by end of this FY (through 84% subsidiary); Cultivation of Artemisinin plant has started at Africa via another subsidiary (who leaf are used for making anti-malarial Artemether drug). USFDA of Managlore facility expected at the end of this FY.
- **Bad patch **: Not so nice year for Sequent. 2 separate accident in 2 different plant, few employee’s death, production stoppage for months. Profit nosedived from 15Cr/qtr to 1.5Cr/qtr. Forex loss take it to negative territory of -15Cr/qtr. Past looks black for this company, so no point looking ROE/ROCE.
- Uncovering the Mystery : Even with the bad patch that this company is going through, the stock price is moving up day-by-day, hitting 52 weeks high. The reason being around 88% of the stocks are held by Promoter(56%) and HNI(32%). To add to it promoters are buying from open market, by selling their stake at Stride Acrolab. The promoters are subscribing 22L warrants through a preferential basis, taking their stake to 65.47%)
- **Positives : **Good/Experienced promoter, low floating stocks (not more than 5-6%), Big names like Prof Manekar’s family member and Satpal Kattar, Promoters subscribing 2100K share on a preferential basis to hike their shareholding by 9% to 64.5%
- **Negatives **: Huge loss last quarter (but still stock touching 52 weeks high !!!), next 1-2 quarters may be not so good. Company can’t be judged by traditional matrix like PE, ROE, ROCE.