Aditya Birla Capital(avg – 222.8) and Strides Pharma(avg → 1600+) are the special situation stocks. It is the first time I have taken stocks to practice special situation investing.
Aditya Birla Capital Thesis
I was initially reluctant to buy this company. Sawing it in a smallcase portfolio that got shared on twitter and the special situation video by SOIC which talked about change in management helped in study in deeper.
Considering the management is not minority friendly and hence it is 2 percent of my portfolio.
Under new management it is doing very good.
NBFC is going to merge with the holding company which would remove holding company discount.
Currently considering growth of their nbfc business, their is a opportunity for rerating.
Gnpa and nnpa profile is as per chola mandalam and has been improving for few years.
Triggers
- Holding company discount to go away – near
- Amazing growth with good npa profile – near
- Interest rate cut. – medium
Negatives
- Corporate loan book.
Need to understand how their 70 percent loan book is secured.
- Management in the past have shown that they are not minority shareholder friendly.
Moat
Low cost of funds at 7 percent.
Stage
Stage 3
Vstop
Positive
Other comment on technicals
Stock price in a band
Valuation
Less than 2x of the book value
ROE is in mid teens.
Strides Pharma thesis
To get a hold of the Onesource.
I have been tracking Strides since it was first added by a famous smallcase though bought it very late at over 1600+.
- Just to get the child company which is valued at 1.6b.
- Child company is the supplier of injectible for majority of generic companies in GPL1. Things will start from Q3.
3.Injectible is major cost component in GLP-1 drug, even more than api.
Nearly bought it at 3.5x of sales
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