@Mahesh Foreign currency risk even though always present shouldn't be a big factor. All exporters face such risks and their effect lasts at most for a couple of quarters and it evens out over the longer term so i don't assign a lot of importance to it. If the management doesn't have motives of making money from forex i would not feel rupee dollar rate to be a major risk going forward. A better idea would be understanding business risks playing out in the normal business operations
Posts in category Value Pickr
Syngene International IPO – Views invited (14-09-2015)
True Karan....apart from that if there is any GVK-type issue because of which there is disregard for a particular country like India could also affect business so is sharp depreciation of rupee, say it going to 75-78 could make it suffer hedging losses because of huge hedge contracts entered recently.....
As far as dedicated centre business goes, atpresent it contributes ~36 % to the revenues but there might be more dedicated centres on the way once CMS business approaches stabilisation and that is the most stable business for the company since contracts are long term and provide for enough compensation. Company might be inclined to encourage more clients towards dedicated centres.
Rgds.
VLS Finance limited (511333) (14-09-2015)
Sure. I will ask these questions. I myself need to review the annual report thoroughly for preparing my own questions.
Syngene International IPO – Views invited (14-09-2015)
The major force driving Syngene would be increased R&D spending by global pharmaceutical companies. Also companies would focus more on decreasing costs and hence would partner companies like Syngene. By reading RHP the major risk i could ascertain was with regards to clients of Syngene. Since it is kind of service related work one needs to monitor what are the developments taking place with the major clients of Syngene for eg. Bristol Myers. M&A activities in pharmaceutical companies can lead to alteration of these contracts which could have a material impact on earnings. Also any change in policy by these companies can only be known by studying the client companies in detail
Syngene International IPO – Views invited (14-09-2015)
Hi Rupesh,
Rgdg. your queries......
(1) Since Syngene has only recently came out with its IPO so risk factors are very well documented in RHP -- you can refer that.
If you ask me then the biggest risk factor is not meeting the delivery schedules of customers is the biggest risk factor to me. NMEs are very sensitive contracts where if you falter on even one thing then customer suffers alot -- even more than you --so margin of error is minimal in such contracts. This ofcourse I am talking about commercial manufacturing......having said these, it is because of this factor that inspections and checks are most stringent while catering to this segment and unless customer is working with you since last many years (in many cases decade) and is fully satisfied of your capability and integrity that he will enter into contract with you.
Second biggest risk factor is any mismanagement during CAPEX i.e., any delay or something, especially Mangalore plant once work starts there next year.
(2) Name of the molecules as well as many customers might not be talked in detail because of NDAs signed by the company because of confidentiality issues involved in the sector. If you have researched PIIND before then you must very well know this.
As far as what company is actually doing, as said before, RHP is filed only before two months and there is no point in discussing entire thing again here. Still from RHP if you don't understand anything then here that can be explained lucidly.
Feel free to get back in case of any further query.
Rgds.
Syngene International IPO – Views invited (14-09-2015)
Thanks Mahesh, will do the same and hope it helps
Syngene International IPO – Views invited (14-09-2015)
Post stabilisation and successful venturing into commercial manufacturing, Syngene will be the only listed company in India having exclusive focus on NMEs and catering to the entire lifecycle of an NME....Since PI (CSM) & Divis operate with a similar model but lakc the presence in entire lifecycle, it is my personal expectation that Syngene should trade at premium to both the said companies. I can be wrong in my assessment.
Syngene is not a full fledged pharma company but is like a service-oriented company catering to pharmaceutical sector apart from others. To understand the segment in which Syngene is operating in, apart from company's own past ARs as well as RHP, you can refer to past ARs of its Indian peers like GVK as also presentations, ARs and brokerage reports of its international peers like Wuxi.
Once any company's management falters in walking the talk, I stop actively tracking the company as management quality and conduct is the highest weightage I put during my investment decision.
How to derive ROE using Dupont analysis (14-09-2015)
A company can increase ROE by increasing its debt. On one of the blogs I read dupont analysis is best while calculating ROE. Can someone explain by giving a actual example of any company [ may be Motherson Sumi whose Debt to Equity is 1.55
Thanks in advance
Sunny
GRUH Finance – mini HDFC (14-09-2015)
From what I have been observing about the urban markets in Gujarat and Mrashtra - Gnagar, Ahmedabad, Pune and Mumbai, it seems that investments in RE have slowed down considerably.While the target segment of Gruh is completely different, there is bound to be a trickle down effect and it would be interesting to see how the loan book grows in the coming quarters.
This is the best time for Gruh to expand (hopefully proactively, not olnly through referrals) and as the MOSL report says, UP is the place to be. Though they have a grand total of 1 branch in UP as of yet.
Disclosure: Invested, hoping for further consolidation before adding more.
Towards a Capital Allocation Framework! (14-09-2015)
agree . v few investors i know have put over 10% of their total nw in equities.I have no investment other than in equities ( other than primary house) even FDs or insurance.I also believe in concentrated bets .However its not as easy as it may sound - I will not advise this for many other investors.I think the key is that when you bet in such a concentrated manner ( 100% of one's networth in equities that too in a few stocks say 4 or 5 ) one must track the co intimately and be willing to exit at signs of trouble .Else this approach can be self destructing.