Abbott India is a Multinational pharma company.

The key revenue drivers in India as of now are the following segments:
-Women's health(biggest division)
-Specialty care(key product: Thyronorm)
-General care
-Consumer care(expected to be future growth driver)

Their parent company in the US, Abbott Nutrition private ltd sells popular products such as Pediasure (Note that these revenues don't reflect in the Indian company as it is a 100% subsidiary of Abbott USA)

The operating profit margins show a rising trend indicating their focus on increased profitability. They are investing in assets such as real estate currently to develop the future growth drivers through branding and marketing products to consumers with high spending power. The focus seems to be in creating the brand Abbott as is reflected in the big logo which they paste on their products.

Overall, this seems to be a futuristic MNC pharma company with high growth potential. Attaching some images from the recent annual report of the company.

Key risks in my opinion include the decreasing spending power of the Indian consumer, profitability decrease for current products due to governmental norms etc.

Views & criticism from senior members & others are invited as I may be biased due to recent tracking position in my portfolio and family's portfolio.

Screen Shot 2015-11-03 at 4.08.03 pm.png732x605 141 KB

Screen Shot 2015-11-03 at 5.02.15 pm.png712x270 38.6 KB

Screen Shot 2015-11-03 at 4.12.22 pm.png758x594 154 KB

Disclosure : Recent tracking position

Screen Shot 2015-11-03 at 4.09.56 pm.png793x324 36.3 KB

I feel there is a difference in the point of view of FIIs and DIIs towards Indigo and aviation sector in general. The folks in the west are closer to the happenings on crude front (disruption owing to fracking, US becoming energy sufficient from crude importer sometime back etc.) and I feel they are seeing crude at low levels for good amount of time. Besides, they are seeing how Airlines in the US are making money owing to low crude. Most of the marquee investors in Indigo also own LCCs in the west, as per the article above.

On the other hand, the crude impact is yet to be fully play out and hence appreciated by the Indian firms, hence the DIIs have probably not bought into this yet. Also, Indian aviation industry has had a terrible track record in the last decade.

Overall, I feel once Indigo starts throwing dividends, indian investors will start flocking to it.

Vijay

Hiteshbhai,

Excellent narration of the Jagran story. Few questions I have

1) Company's operating margins in last 5 years have been fluctuating between 19-29% and hence the bottom line growth seems relatively slower compared to its peer (DB Corp - CAGR 12%; HMVL - 28%). What is the normalized margin trajectory for Jagran post turn around of Nai Duniya & Mid day and consolidation of radio business?

2) There is hardly any top line growth in Other publications (Mid day, Nai Duniya), Dainik Jagran has been growing at 10% odd CAGR while radio business has been growing at faster clip but with much smaller base. In this context, what will drive the topline growth going forward?

To me, two critical catalyst in the Jagaran's case

• Improving margins on non- Dainik Jagaran publications from 7-8% to Dainik Jagran's base business OPM level of 28-30% ( Though I am not clear whether this is possible given the smaller size of these publications and niche market that they serve hence the hypothesis needs to be validated.) It will also be useful to understand the time line to achieve the base business level OPM.
• Management has indicated in concall that new cities acquired in Phase-III will add 40% to topline eventually thus driving the contribution to topline. Whether company is able to achieve the same and in what time frame?

Hey Everyone,

Please note down the following points in connection with Q2 (2015) Conference Call:

Overall:

1) Q2 financials : 45 cr (2015), 36 cr (2014)

25% growth YOY EBITDA 10 cr (2015), 7 cr (2014) EBITDA margin 22%

2) Lease Model

Contribution of Lease Hotel is 39% 
Average room rent INR 2950 
Room occupancy rate 51%
Total Rooms 623

Currently Byke has 697 Rooms and is targeting 1200 Rooms by 2018. Focused to grow via leased and chartering business.

3) Room Chartering Model

Contribution of Room Chartering is 61% 
Average room rent Q2-2015: INR 2400,
Occupancy rate : 91%
Inventory sold 1 Lakh
240+ Agents

A) Question:

In connection with OYO as competitor -

Answer:

Yes, Byke understands the trend of mobile penetrating and also updated the following:

1) Assured that currently focussing on Agents
2) Looking to burn less cash when compare to OYO as they love making money than burning
3) OYO is in different business;
4) The pie is very big;
5) 1% of total market available.

We buys inventory only for the season time and OYO guarantee's for the whole year.

B) Question

With regards to Higher Occupancy Rate when compared to competitors?

Answer:

1) We buy inventory only in season time.
2) Advance of around 3-4 months given to hotels.
3) Using network 50+ cities.

C) Question:

In connection with websites working on selling hotel rooms?

Answer:

1) They just guarantee hotel, no inventory is booked.
2) No booking of room by them.

Conviction is getting stronger and stronger after listening to this call.

Regards,

Gaurav