One has to accept what the market says. The markets never do the things we want. This is the lesson I have learned.
Whenever a stock gives a breakout there is a lot of excitement. Lot of traders and investors rush to buy shares. Then suddenly there is a cooling off. This is called a pull back. At times the stock will lie to the level from which it broke out for a considerable period of time. This is when frustration sets in. The impatient cannot wait and sell their shares. Suddenly thereafter the stock will make its move and give a huge break out once again. This keeps happening again and again. The wait is very frustrating. I agree on that.
I think the cmp of around 185 plus/minus a few rupees seems a good level to accumulate unichem. Stock seems to be giving the much needed time wise correction without correcting too much in terms of price damage.
I think unichem can post eps of close to 15 for fy 13 and 20 for fy 14. applying PE of 15 which it usually enjoys, one can hope for targets for 225-300 within 6-12 months.
Personally I feel this is a buy and hold kind of company with all expansions rejigs almost having been finished by now. So now is the time to sit back and enjoy fruits for next 2-3 years.
unichem this week managed to close above its earlier resistance zone of 200-203.
even the point and figure charts show it closing above 203.5 where it faced supply earlier.
Now I think next quarter results which are around the corner will guide the stock price. If trend of last two quarters continues and stock gives good results, expect further fireworks in stock price. Post this quarter results markets will start expecting numbers for fy 14 and extrapolate the price accordingly.
Total Income up 4.5% to 232.58 Cr from 222.63 Cr.
EBIDTA up 9.7% to 40.35 Cr from 36.78 Cr.
Net Profit up 24% to 30.35 Cr from 24.47 Cr.
EBIDTA margin is 17.4% v/s 20% (SQ-12) and 16.5% (DQ-11)
NET Profit margin is 13.1% v/s 13.3% (SQ-12) and 11% (DQ-11)
Total Raw material costs as a %ge to Income is 35.9% v/s 36.7% (SQ-12) and 37.2% (DQ-11)
Employee costs to Income is 15.8% v/s 13.6% (SQ-12) and 13.6% (DQ-11)
Other expenses to Income is 31% v/s 29.7% (SQ-12) and 32.7% (DQ-11)
9M/Fy-13 v/s 9M/Fy-12:
Total Income up 24.8% to 761.69 Cr from 610.21 Cr (Fy/11-12: 803.19 Cr)
EBIDTA up 52.2% to 143.18 Cr from 94.1 Cr (Fy/11-12: 127.43 Cr)
Net Profit up 66.4% to 98.56 Cr from 59.23 Cr (Fy/11-12: 82.46 Cr)
nspite of good results in comparison to same quarter of previous FY market is disappointed with the results. Ideally it should be compared in this way instead of previous quarter. Is my understanding correct or small/mid caps behave reandomly?
Yes I fully agree with you. There are some greedy operators in this counter and thatâs the cause for this random behavior. It is one of the cheapest in pharma companies and is definitely a great one to accumulate.
nspite of good results in comparison to same quarter of previous FY market is disappointed with the results. Ideally it should be compared in this way instead of previous quarter. Is my understanding correct or small/mid caps behave reandomly?
I personally believe Sales of 4 % growth (YOY) is a negative. The real trigger would come if they can grow the Revenues now since they have improved the NP margins considerably.
I am also a little disappointed with the results. Expected the turn-around story to continue. And pharma cos are expected to give better performance in the second half as mentioned earlier.
Am happy with the poor results, as it allowed me to increase my percentage allocation at good prices.
Believe, it a much longer and larger play, with key drivers being exports to US, and developing countries.
It had received ANDA approval for some drugs, and many people thought this should improve revenue and margins this quarter.
In October,Unichem Laboratories received ANDA tentative approval from USFDA for IRBESARTAN TABLETS. However, theFinal approval willbe received after the patent expires on Dec 7, 2015. There would be similar stories with many other ANDA applications.
Thus, the topline and bottomline effect of these ANDAs would be visible in 2-4 years time.
Regarding very low revenue growth in this quarter compared to trailing quarter, we mustrememberto take into account the seasonality of pharma and healthcare industry, with sales being maximum in Q2 due to infectious diseases, and lower in Q3 due to lower infectious diseases, and lower elective hospital admissions in Q3 due to cold and holidays (diwali, christmas)
thanks vijay pahwa for the video llink. it seems to answer most of the questions in an investorâs mind.
about the exports potential, i fully agree that incremental growth will be coming from exports. any improvement in the domestic scenario will be the icing on the cake.
Personally I too feel like increasing the allocation with the current fall but it is already a top holding for me which is in a way holding me back.
Highlights of the concall (from some broker report)
â The management believes the domestic business was impacted due tooverall slowdown in the domestic market. It has guided for a muchbetter performance from Q4FY13 onwards.
â The management expects the domestic business to outperform theoverall domestic market growth by 200-300bps.
â The company will be focussing on improving the productivity of thedomestic sales force. Unichem would also hire 200 more staff tostrengthen its field force and reach out further to ex-urban cities.
â Management expects the pricing policy to get implement by June, July-2013
â Management expects to file about 1-2 ANDAs per quarter, especially asits R&D centre in Goa is now ready.
â Niche Generics continues to struggle and the management would beable to provide better guidance on that subsidiary only after Q4FY13.
â The approval for the Indore SEZ facility might not come in FY13.However, the management is confident they have enough capacitycurrently to drive exports growth.
â Management has guided for 100-200bps increase in margins everyyear, which will be due to better utilization of overheads.
Any other member who heard the concall? if anything is missed out here they can please add onâŚ
