Posts tagged Value Pickr
52 week highs and all time highs strategy (23-11-2023)
Hello Hiteshji,
Does HCC fit your following mental model framework as explained in the attached PDF?
“BALANCE SHEET CLEAN UP : Aggressive focus on debt reduction as an
indicator of long term turnaround. Fund infusion from promoters, and external
investors instill confidence. Sale of assets, laggard low RoE divisions, free up cash”
Mental Models Cheat Sheet.pdf (134.6 KB)
Sugar Cycles: 7-8 years of losses followed by 2-3 years of super gains! (23-11-2023)
Thank you @Donald Donald. Would you mind explaining the impact on companies from other states ? Bring cyclical i still trying to understand this sector. I could see many sugar stocks had a good gains/Breakouts today.
Disc: not invested now or in the past ever in any sugar stocks. Still learning.
Affle India – India Mobile Internet Advertising Leader (23-11-2023)
Just observed a interesting chart patterns
Disc: not invested, just observed as it recently did a golden crossover
Biocon – The ultimate biosimilars play! (23-11-2023)
With such a well researched stock, Market not showing much love to Biocon is because of multiple reasons. My personal views on the key reasons:
- Mountain of debt to finance the Viatris biosimilar acquisition. Biocon has still not clarified on how it intends to reduce the debt especially with the current high interest rate scenario hurting them all the more…may be market is anticipating that there will be further equity dilution to comply with debt payment timelines
- Delay in launches of long anticipated biosimilars like Aspart, Bevacizumab etc.
- Limited success with Hulio biosimilar launch
- Continued price erosion on many of the biosimilars (this is industry wide problem, similar to how it played out in Generics in past few years)
- Holding company discount and muted performance of subsidiaries
There is more, but I would stop here…Many of us (including myself) bought into the narrative of Biosimilars and then saw the stock price correcting further or doing nothing over last 3-4 years. While the potential is still there, it is not converting into reality and that is why market does not want to give it any premium…Would request anyone planning to buy into Biocon to study concall over last 6-8 qtrs and they will find answers themselves…It is complex business (especially in the main market of US)
Disclaimer: No recommendation, please do your own due diligence…I exited some time back with losses…if situation improves in future, will relook at it…
Astec Lifesciences (23-11-2023)
Fantastic thread and got me up to speed within 2 hours of research. A word of gratitude to some fantastic contributors here.
Personally, I have made the following high level obervations:
Current red flags – Degrowing topline, reducing margins, eroding reserves, rising debt (mostly short-term debt and working capital loans), interest and depreciation cost (reserves lower can total debt), high inventory losses. Rich valuations (~27 times of 2022 earnings (best year), even with the current drop).
Management has stopped calls since Nov 2022.
Key monitorable,
- CDMO business growth
- R&D – 1-2 molecules every year
- Improving in topline, margins and bottom-line (not visible before Q4, but let’s see)
- improving cashflows, reducing working capital loans and reducing debt and interest cost. (Gross block growth has also bumped up depreciation, so PAT will be muted further).
- improving contribution of CDMO / CRAMS business.
Watch out for major planned investment in CDMO business in FY25.
Potential turnaround but risky bet for now.
Disclosure: Not invested, curious.
Genus Power – Smart Metering (23-11-2023)
did management share this in any concall. If correct then genus shouldn’t have any cashflow or payment issues
TARSONS products ltd (23-11-2023)
what is the logic of doing capex of 550 cr having asset turnover of 0.7
Rategain – Fast Growing SaaS Leader (23-11-2023)
any potential names for acquisition?
TARSONS products ltd (23-11-2023)
RESULT Q2FY24 Concall
- EBITDA margin for Q2FY24 stood at 38.3%. This was impacted on account of lower revenue growth and GP margin leading to a negative operating leverage rate, increase in the cost on account of manpower and marketing expenses, which we believe are investments to fuel future growth opportunities
- Commercial production of cell culture and other products is anticipated to start in Q1FY25.
- Radiation & Isotope Technology for this purpose. This strategic move aims to reduce our dependence on a single source in West Bengal.
- Revenue breakup- export sales contributed around 35% and domestic sales contributed around 65%.
- BIS certification issue- raw material supply is getting a lot of problems because of the implementation of one of the concepts called BIS. And the government, obviously, is not allowing all kinds of imports without having that kind of certification.
- Ramp up of new capex- we expect to scale up in 4 to 5 years, completely ramp up to 100% of available capacities.
- Asset turn- 0.7x on 550 cr capex = 350-400cr revenue potential.
- Revenue potential- the existing capacity and the upcoming capacity, we can touch a revenue of about INR700 crores to INR800 crores.
- There would still be a lot of space for future capex.
- 500cr guidance- INR500 crores in FY ’25 looks highly unlikely at this point of time. no new guidance now.
- ESG issue- in some countries, the government banned or limited the usage of plastic because it’s not ESG friendly.
- GST notice- 66lakh
- Inorganic acquisition, which we are looking for in Europe and U.S. kind of countries.
- I dont see anything good happening in the next few quarters, operating deleverage is going to play, so I am exiting with 14% loss.