Yes its at a 75p/e and I am contemplating selling out as well

But here are a few thoughts on why I am in a dilemma on this

1.The capital intensity of this business is very low so we get back a lot of the cash flows in the form of dividends and buybacks so its not an apple to apple comparison with other business on p/e alone

2.If their guidance of 30% is met for next three years the stock is at a 35 p/e then and added bonus of people moving to paid subscription could play out for a long time to come so could still be a good hold even then

3.The management is usually conservative on the guidance and they seem to be doing better than what they promise so hoping they keep doing so. They seem to be rewarding shareholders with buybacks and dividends so hopefully they keep that going too. EPS has basically tripled in 4 years due to earnings along with buybacks excluding the dividends

4.Their profits are bit understated because of the write off policy so 75 p/e is a bit overstated here. Rougly TTM PAT is 150cr and content cost out of that is like 65cr, so we might have to adjust for this. Also besides the content cost rest is payed out to shareholders in terms of dividends and buybacks

Would love to hear thoughts on this dilemma

Since my issue with the company is only the valuation, I am hanging on but dont know what I would do if this rally keeps going

I was recently doing the fundamental analysis of Titan Ltd. I was going through the Inventory part.
To me i found out that the company was able to do 3x the sales consistent for the last 10 years.

Is it a good thing that the sales has been consistent or the sales should be increasing with the time being.

Post Covid the comapany has increased the inventory growth to a significant level, but can anyone explain why the turnover ratio is same.
Is the situation same with other peers also ?
Thank you

7dc7fcbb-ed78-4011-ae2a-91d6eae6891c.pdf (558.3 KB)

Highlights from the recent con call and my findings:

• Revenue New revenue streams Animal health and Crop Science in coming years 2-3. Formulation segment (good margins) is also expected to contribute.
• Margin expectations in the coming quarters Management gave a guidance for 20% EBITDA margin for the full year for the current FY. The first half had a margin of 14-15% so one should expect a margin of 23-25% in the next two quarters which can go on for the next few financial years.
• This anticipated improvement is attributed to a strong order book and scheduled deliveries, particularly within the CDMO segment.
• This year growth is driven by the CDMO segment
• CDMO division is expected to drive the majority of the growth in FY25, the management anticipates growth across all segments, including Generic API and FDF in the coming years Q4 call will give a much better picture
• Operating deleverage the company is going through a deleverage phase due to the cap ex in the growth initiatives along with the challenges in the generic API segment
• Operating deleverage ends the management mentioned that the deleverage may have ended and we can expect the leverage to come into play after one or two quarters
• Cap ex plan of 2000 cr: Majorly of which will be in the CDMO, around 200 cr in Formulation segment, api will receive the lowest share.
• Growth triggers: Continued CDMO Growth (already doing well and good quarters expected), New Revenue Streams from Animal Health and Crop Sciences (in 2-3 years), Generic API Growth Through Portfolio Expansion (Currently struggling and going through deleverage because of the expansion but deleverage has ended as per management and leverage can kick in after few quarters which can improve margins), Formulations Business Expansion (good margin business can move up in the value chain)

Next 2-3 years outlook is good as of now with good capital appreciation as per me.

Disclaimer: Invested. Not a recommendation.

I went through the recent concall to make sense of the valuations, lately this had become more like a passive investment.

The stock trades at 75 p/e now. There are several brokerage reports covering the stock like Arihant capital etc. The DII and FII % are approaching 5%. Management as always have promised 30% growth and maybe only now the market has started believing. I am not an expert on valuations but 75 p/e for 30% growth looks expensive to me.

Concall wise, quite bullish.

Content acquisition is still going slow.
But their warner deal would provide a step up in grwth for the next 3-4 quarters. Warner was still ingesting content.
They are trying for brand sync deals. Signed one with motorola. Value not mentioned, more to come. No idea on how meaty this could be.
Yet to decide on events business, maybe next quarter there may be an update
Wynk app shutdown may impact for 15 days, management thinks users will move to other platforms

They supply electronics pigment to a US based company. They have 4 produts – 2 are in market and 2 in r&d stage…

Planning 15-20% contribution from electronics segment over next few years.