Overall, I was highly impressed with the NPMs of this company for a business of this nature. Additionally, consistency in growth over the last 4 years as well as management of OPM margins has been good, far less volatile from single API companies. It has nowhere near the scale or the price leadership of Divis, but the company’s margin profile and sales growth make me wonder if it should still be valued where it is.
Additionally, the guidance in the last concall was very interesting. Management is guiding for 31% odd OPMs which are impressive and in fact several participants including Mr Madhusudan Kela were checking if it could match Q4 at 33%. Either ways we should get a solid 30%+ margin profile + topline growth with the capacity coming on line.
Eventually it was a company with what seemed like strong growth tailwinds including topline/bottomline, strong charts and volumes, at sub 14 PE/~3x book, with ~30% OPM, ~20% NPM and 4% Div yield and went ahead with the investment last week.
Disclosure: Invested in self and family accounts. As I am invested I am biased towards the company. I am not a SEBI advisor and this is not investment advice.
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