Thanks for sharing the article.
On the stock price catching up with with profit growth, I feel it is the other way round. in the last 3 years, profits have caught up with share price.
Market is currently uncertain about their dependency on one product, competition coming in this area and destocking of agro chem globally. Some one on twitter mentioned about a report from JM Financial where they mentioned going forward things will get harder for PI as competitive intensity will increase. I could not find the report though.
Management has always been conservative in their projections. They are good capital allocators and continue to enhance their technical capabilities by adding more scientists/PhDs, their relationships with clients are sticky, they have stayed away from commodity chemicals. Optionality of Pharma CMS is yet to add meaningfully to topline and bottom line.
With a right to go wrong, my view is that it one of those where a positive surprise against market perception can give a good upside to stock price.
Disc – one of my top 3 holdings.
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