I have recommended a BUY on TCPL Packaging @ Rs.55 on November 11,2010 ( For old posting click HERE) .Today company declared its December quarter result where its Sales improved from Rs.78 Cr to Rs.95 Cr and net profit more than doubled. At CMP of Rs.71,still recommending to HOLD.
Monday, 28 January 2013
Friday, 25 January 2013
Panacea Biotec was darling of Investors till 2008 .This is the first pure biotechnology based pharma company listed in Indian stock exchanges in 1996. Company along with its subsidiary Chiron Panacea is the second largest vaccine maker in India next to Serum Institute of India. In addition to vaccines company also present in formulations. In the formulation segment company concentrating in pain management, cardiovascular disorders, diabetes management and organ transplant. Company having a strong R&D with more than 200 scientists and it introduced many ‘firsts’ in India. In the vaccine segment company introduced vaccines for Polio,H1N1 and Hepatetis B and company’s products were best sellers in the past. Its misfortune starts with the banning of its many vaccines by WHO . The combination vaccines EasyFive, Ecovac4 and EnivacHB were de-listed by WHO due to some quality issues found during their routine inspection. This issue noticed in bulk drugs sourced from one of its subsidiaries PanERA Biotec for manufacturing final products .Due to this issue company disqualified from supplying these vaccines to UN’s world Health programmes .For the past many years about 40 % of company’s income was from WHO supply and Easyfive was the highest margin product for the company. Due to this setback ,in the past few years company concentrated in other segments to develop their business . Last year company started a new production unit in Baddi ( Himachal Pradesh) exclusively for manufacturing medicines for oncology segment. During September 2012 ,company signed an agreement with US based Osmotica Pharmaceuticals for developing high entry barrier generics and branded formulations for US market. ( Interview of MD on this subject HERE).During November 2012 Company signed another similar agreement with Kremers Urban Pharmaceuticals Inc (subsidiary of Belgium-based UCB) and launched its first product ‘Tacrolimus Capsule’ in US market. In a strategic diversification into related fields ,Company is going to start a hospital –Panacea New Rise Super Specialty Hospital – in Gurgaon.This facility is expected to start full fledged operations during the first half of 2013.
Now company claiming that they have sorted out all quality related issues connected with their vaccine facility . After a long gap of many years, in December 2012 company received a Rs.182 Cr order from Government of India for supplying Oral Polio vaccine. This order will be executed between December 2012 to May 2013 period .In an important development , now it is known that the WHO delegates will again inspect company’s facilities by next month. There is every chance to enlist company again in WHO ‘s qualified suppliers list ,post inspection. If it happens it will be a game changer for the company. Promoters are holding close to 75 % stake in its Rs.6 Cr equity company and not pledged a single share so far. It is an interesting point to note that ,ever since its share price started its down trend in October 2008 ,India’s largest vaccine maker and Panacea’s arch-rival Cyrus Poonawalla led Serum Institute of India acquiring Panacea’s shares from open market . Serum Institute’s stake in Panacea Biotech increased from less than 4% in 2008 to the highest level of 13.39 % in latest September quarter.They started accumulation even at a price range of Rs.220+.I believe ,this is clear indication that even the main competitor who know the industry very well is fully confident about the come back of this company in near future .I think worst will be over for the company by this December quarter result . Since its floating stock is very low ,there is every chance for sharp appreciation once it back on track.It is a high risk high profit kind situation ,hence suggesting only for those with high risk appetite.Stock listed both in NSE and BSE and trading around Rs.108/-
Link to Company website HERE
Link to latest annual report HERE
Disc : I have vested interest in PBL
Link to Company website HERE
Link to latest annual report HERE
Disc : I have vested interest in PBL
Thursday, 24 January 2013
Granules India reported a 5% increase in Sales and a 27 % decline in net profit for December quarter . Even the profit was below expectation ,today's sharp decline in stock price seems an over reaction and part of over all negative sentiment visible in small and mid cap stocks for the past few weeks. Expecting an improvement in company's performance once it completed ongoing expansions and achieving stability in operations.Those having a capacity to hold minimum one year can still hold the stock and even add in a staggered manner if it falls below Rs.130/-
Friday, 18 January 2013
Panama Petrochem is an Ankleshwar based manufacturer of specialty oil products promoted by Rayani family.Company having five manufacturing units in India located at Ankleshwar, Daman, Dahej,Marol and Taloja .Its total capacity is 105000 MTPA for more than 80 products together.Recently company started a subsidiary in UAE - Panol Industries RMC FZE. Petroleum Jelly,Liquid Paraffins,Rubber Processing oil,Transformer oil,Cable Jelly,Knitting oil ..etc are companies major products.These products are widely used in industries like Cosmetics,Pharmaceuticals,Electrical,Cable Manufacturing,Textiles..etc. Company selling various branded products for these industries.Panama Petrochem tied up with Germany based Lubcon Lubricant Consultants for developing new oil based products.Crude derivatives are the main raw materials for the company and the current stability in crude price will help the company to protect its margins.Even at the time of higher crude prices,company successfully hiked its product prices to protect its margins to a certain extent.Now, many countries are exploring opportunities to start/increase shale gas/oil production.This efforts may act as a check for sharp spike in crude prices going forward.
For the FY 2012 company reported a Sales of Rs.583 Cr and a net profit of Rs.31 Cr .On a small equity of Rs.8 Cr FY 12 EPS was Rs.39/- . Company is very liberal in dividend distribution too which paid 50 % each in past three years. It is almost a debt free company with a book value around Rs.260 .After hitting a 52 week high of Rs.250, now this stock is trading around at its 52 week low price. Considering promoters’ experience in this industry ,expansion plans ,stability in raw material prices ..etc recommending a BUY @ CMP Rs.135/-
For the FY 2012 company reported a Sales of Rs.583 Cr and a net profit of Rs.31 Cr .On a small equity of Rs.8 Cr FY 12 EPS was Rs.39/- . Company is very liberal in dividend distribution too which paid 50 % each in past three years. It is almost a debt free company with a book value around Rs.260 .After hitting a 52 week high of Rs.250, now this stock is trading around at its 52 week low price. Considering promoters’ experience in this industry ,expansion plans ,stability in raw material prices ..etc recommending a BUY @ CMP Rs.135/-
Link to company website HERE
Link to latest Annual Report HERE
Friday, 11 January 2013
With a market share of 12 % ,Ahmedabad based Aarvee Denim is the second largest manufacturer of denim fabrics in India. Company having three manufacturing units in and around Ahmedabad. Company increased its production capacity by 40 % in last financial year, thus the current capacity stands @ 80 million meters per annuam.Denim prices are currently going through a consolidation phase after some sharp spike in past few quarters. On the other side cotton prices showing weakness which is expected to increase the margins of denim exporting companies. Weakness of rupee is an added advantage. Due to the reduction of Chinese export to International market ,large Indian denim exporters increased their market share in recent times. Other than export ,company selling branded products under three brands - De Extase,Fashion Wrapper and Aden. Size of branded retail operations are limited currently but company planning to open more stores in future. In the financial front too Aarvee Denim exhibiting good performance. For the last September quarter company reported a net profit of Rs.17 Cr v/s Rs.4 Cr .In last FY ,company bought back half of the issued FCCB’s .The current trend in denim and cotton price is expected to continue for some more time ,hence recommending a BUY on this stock for medium term .Keep an eye on the price of raw material in local market and price of end product in International market .Currently stock is trading in both NSE and BSE around Rs.76/-
Link to Company Website HERE
Link to Branded Retail HERE
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