I want to shift from IPCA to Suven/ Granules/ Aurobindo

Friends,

In my highly diversified portfolio, I have the following Pharma stocks:

JB Chem
Ajanta Pharma
Indoco Remedies
Shilpa Medicare
Amrutanjan Health
IPCA Labs

The total funds invested in these six Pharma stocks is about 16% of the portfolio.

I want to reduce the number of stocks in the Portfolio. I also want to get rid of IPCA Labs because it appears that the repeated violations of the FDA law will take at least 12 to 24 months to be rectified.

I am confused whether to sell IPCA and distribute it amongst the five Pharma stocks or to buy yet another Pharma stock like Suven Life Sciences, Granules India or even Aurobnindo Pharma? The reason for the dilemma is because some of the existing stocks like Ajanta, Shilpa and Amrutanjan appear to be overvalued at present.

Any thoughts on the correct course to take.

 

Natco too 8)

 

if you are not making huge losses you may shift, Aurobindo pharma looks to be the best of the lot...it has seen rapid growth in last 2 years, made foreign acquisitions, showed strong profit growth...clearly it is in a different league...granules looks promising but has risen sharply in this bull run, hence I would be cautious...if you are long term investor also look at DRL, its a blue chip....Suven I would avoid, unless you are a high risk taker... however if you are making huge losses and can hold for long term I suggest you may continue holding IPCA, I hold the stock and like others I am shocked at the 2 new import alerts but the information I gather says that violation are not very severe, the management is good and is looking to resolve the issues....even after the ban there are certain APIs which will be allowed to be exported but it does hit the prospective growth of the company, since the fall has not been very sharp my understanding is that market still has confidence in the stock...I would hold it and see how things move on from here...but its your money so you make the final decision.

 

Refer the past:

1. Auro pharma got red flag from usfda for its plant which made us sales of $33 million on 2011. The stock price was around Rs.275 that time.

2.Since that news, it surged to the level of Rs.80.

3.Then on March 2013, usfda lifted the ban. Auro was trading at the range of Rs.150 during that news.

4.Since March 2013, it started to climb up. Now its trading at the level of Rs.1250 (8x returns).

5.Same thing may happen with IPCA too but prior to conclude , pls post the details of those plant of ipca which got red alert such as sales & revenue contribution of those plants.

We can enter into this scrip when usfda lifts the red flag. Then it may climb up like auro

 

I read about the red flag in a blog. There they told that after 5 consecutive consignments which comply to the usfda norms and plant inspection, red flag will be lifted. I think it may vary with the reason why red flag has been imposed.

 

I think if you have lost confidence in IPCA it is better to move rather than wait. When there are so many attractive choices, why wait with agony?

 

Suven, Granules, Auro are performing well and u can switch over to those scrips. Once the usfda lifts the red alert from IPCA labs, then u can buy it on that day.

 

Then he can wait

 

ipca lab
import alert unit Indore mp formulation on 24 march 2015
import alert unit silvassa formulation on 24 march 2015
import alert unit ratlam mp api on 23 jan 2015



co did not have any historical data in this alerts.
latest pharma co clearing fda was
auro pharma import alert unit 4 formulation ban on 27/feb 2011 resolution on 28/mar /2013
fastest resolution done by cipla just 4months and 4 days in 2009.
considering above all information resolution will take place in a year or more.......
ipca is good stock to buy but .....latest import alerts have spoiled the party
i to like to have ipca in my portfolio ........but still all is not well........ache din ?? anewale hai,

 

It depends upon the underlying reason behind the red flag ...in case of cipla, it might be the minor issue ...