Good choices
See, I have always been interested in the micro finance and also banking sector etc. Search for ujjivan and you can see references going back to 2020. To my naive mind, financials look cheap because the market values them mainly on book and not earning, conservative valuation, which if outlook is good then provides good opportunity.

I have acknowledged the person whose extensive write-up was the trigger.

The top guy leaving was from HDFC bank, I think systems incharge there. HDFC systems breakdowns were the talk of town, RBI had banned them from issuing credit card due to this. Ujjivan at height of COVID crisis was a career move like jump from frying pan into the fire Too much was being discounted in price by a panic mode market. FIIs like banking simply because they reflect India macro without studying too much detail of Indian markets, they started dumping stocks when rates rose in US. Due to this I got many at bargain when COVID was totally over and markets recovered, around or lower than March 2020 prices.

I have invested in RBL bank also, thinking banking is such a highly regulated business and that RBI is being extra careful and proactive coz it simply cannot allow eggs on it’s face time and again. Contrarian thinking is good for making money, with calculated bets of course.

Also the percentage of 17 is total current size in folio and not the initial invested amount size. Then I didn’t have 14 holdings but 20+, and amount in each was less.

REC Signs MoU With PFC For FY24 & FY25 | BQ Prime

If we look at VFX industry as a whole then one can compare it to IT service industry, at least at the top. And the factors which played out in favor of IT sector in India, similar factors such as labor arbitrage, good communications skills etc. can play out in VFX industry and we possibly can see VFX service exports growing at handsome rate.

However, there is one major difference between the two. The VFX industry is commodity industry as compared to IT service companies because in case of VFX, the skills required, the operations to be performed and the output to be delivered has limited variations. The only differentiating factor is the creativity and decision making around how one wants to design & shoot a particular shot and in turn a movie. And this is the factor that no movie maker would want to outsource. I think Phantom could possibly in a better condition considering that it is a creative studio rather than just a skill based studio.

Also was thinking about disruption that AI can cause in the VFX industry. As @SambitMishra has pointed out in his post earlier that there is possibility that AI can take away some base level jobs and I had similar feedback from a relative of mine who works as cinematographer with very known production house. So the question remains – If AI can do some of the low level jobs and can reduce the time & efforts required, wouldn’t it reduce the cost difference that Indian studios were able to offer because of the labor arbitrage?

Sembcorp case – Is the arbitration amount on expected lines? I was of the view it would be around 500/600+ Crores

Piramal Pharma Q1 results and concall highlights –

Revenues- 1749 vs 1482 cr, up 18 pc
EBITDA- 171 vs 89 cr, up 92 pc
PAT- (-) 99 vs (-) 109 cr

Sales breakup-

CDMO- 898 vs 770 cr, up 17 pc
CHG (complex hospital generics)- 617 vs 508 cr, up 22 pc
OTC- 239 vs 211 cr, up 13 pc

Successfully closed US FDA inspection at Pithampur with zero observations

Historically, H2 is better than H1 both iro revenues and profitability

Rights issue launched at Rs 81. Promoters subscribed to it fully

Launched 11 new products in the India – OTC business

OTC power brands- Lactocalamine, Littles, Polycrol, Tetmosol, I-range grew 15 pc & contributed to 23 pc of OTC business

Have raised 1050 cr via rights issue primarily for debt repayment

CDMO business witnessing continued order flow momentum. Generic APIs demand also improving

Witnessed string inhalation anaesthesia sales. Launched one new product ( in CHG business ) in US in Q1. More products lined up in pipeline

Recently expanded capacity at Grangemouth facility to help in Anti Body drug conjugate business ( in CDMO segment )

CDMO breakup of molecules –

Pre Clinical – 20 pc
Phase -1 – 25 pc
Phase- 2 – 12 pc
Phase-3 – 43 pc

Piramal Pharma is 4th largest inhalation anaesthesia company in the world wrt combined mkt share of – Sevoflurane, Desflurane, Isoflurane and Halothane

Has 40 pc mkt share for Sevoflurane in US

Saridon, Supradyn are also company’s popular OTC brands

Company has 49:51 JV with AbbVie for sale of Othalmology products in India. Strong presence in – Dry Eye, Glaucoma, Infections and Inflammation

Net Debt at end of Q1 at 4700 cr

It was 4800 cr at end of Q4 LY

In last 9 months, 05 of company’s facilities have cleared US FDA audits

Currently have a pipeline of 27 injectable products under development in the CHG business

In the CDMO segment, 35 products are in Phase-3 This can provide lucrative commercial manufacturing contracts for the company

Q1 capex spend-147 cr

Company to go slow on further capex to keep the Debt levels under control. As such, most of the capacity expansion is already done

Company expects the scale of business to expand signifigantly in H2 leading to better operating leverage and hence profitability

Company expects interest costs to fall significantly wef Q3 when the proceeds of rights issue are utilised

Sevoflurane comprises 80 pc of global demand for inhalation anaesthesia and is also growing well. Company currently can’t keep up with the demand, hence expanding/debottlenecking capacities of Sevoflurane

Expect most of the Phase-3 CDMO molecules to commercialise in next 3 yrs – this can be a big revenue/profitability driver in the future

WuXi, Lonza and Piramal are the only major players in anti body drug conjugates (ADC) Mkt. Their demand is steadily going up. Company’s expanded ADC facilities are expected to go live in H2

The new CHG product launched in Q1 in an injectable product

Disc: holding, biased