Quoting for the Business Today article:
“Our profit margins are miniscule because the main aim is not to make profit,” says Ramdev.
Surely, they can be disruptive if they provide same quality at much less cost. But how sustainable can that be, working without profits? Will suppliers, employees, distributors, retailers also work without profit?
Suven 502 may pass Phase 2 or not.
As far as I know Suven is only Indian company taking initiative in drug discovery ( Correct me if I am wrong)
I strongly feel that Suven 502 should not be monetized after Phase 2, instead it should go through Phase 3 which will give good experience to company.
Suven has strong line of clinical trails. One day it will hit the bull.
Disc: Invested from lower levels
Software product cos. have habit of acquiring research at inflated prices and Take Soln. is no different. Capital allocation has been poor in the past. They took debt to acquire assets which did not yield good enough results and hence debt never really came down. Someone compared FY11 and FY15 profits and it appears that they have stagnated. In reality, EBITDA has grown in line with sales but accelerating depreciation (and amortisation?) has kept PAT in check. I haven’t done study on why its recent acquisition should work.
Disc: No holdings
For Opening Demat Account, Need Overseas Address proof. Not sure , will confirm with compliance team and get back to you.
possible.. by the way… since the stock can go up tomorrow, i think there’s still something missing in my understanding… and this makes me sad because there’s definitely something that is not outlined in that notice which is playing a part in deciding the price.. will try to clarify this with bse tomorrow
Hi,
I know during ANDA filing the formulation maker has to identify the API source.
For the drugs that are coming off patent, Is there anyway to find out how many formulation makers are using Neuland as API source ?? I see that only as any hope to see topline growth.
Also,
One question is that why do formulation makers buy API from other when they can produce it themselves ?
Then..it will be capped at 397.6 till end of Dec…
But big problem is if it hits 2 UC with 10% in jan. first week..( from 397.6 to 481) then they will switch to 5% circuit limit..Then with 5% circuit limt yearly limit is 395..which is far less than the market price of 481..
That means if stock hits 2 UC then it would be end of story till 30th sept. 2016..
Like I said before, the 1% additional comes because the midcap index itself has moved up during this time. the stock gets an additional room over and above the limits you explained based on the midcap index movement.
Hi Alekh,
At a high level, ultimately everybody is trying to come at a decision whether to buy a particular stock or not. But as I said in my post above that it is a mixture of all the factors and not just EV/Tonne or EV/EBITDA in isolation and hence wouldn’t say what is a good EV/EBITDA or EV/Tonne.
For e.g. EV/Tonne of $25 or $30/tonne is very cheap but if there is huge oversupply due to massive existing capacities and there is no visibility of demand improving for another 2 odd years or more then buying this cheap also may not help as opportunity cost lost would be a lot, etc,. (I think you get the point 
)
That said, I personally feel that Deccan and NCL are still not expensive and decently priced (don’t want to use enticing adjectives ), as at a high level, even if I take today’s mkt cap of approx 500 Crs. for Deccan and their FY15 debt of 159 Crs and Cash balance of 26 Crs. then their EV works out to be (500+159-26) = 633 Crs.
Deccan’s capacity is 2.2 m tonnes. Therefore EV/Tonne will be (633 Crs/2.2m tonnes) = Rs 2877. Therefore in $ terms at exchange rate of Rs. 66 per $ this would work out to be $ 44.
Which ($ 44) I don’t think is expensive for a company:
Which has demand visibility in the region ( demand due to constructions due to Andhra/Telangana state formations, govt. spending on infra will start showing at ground level as well; Not much real estate demand but if that picks up then wud be more better).
Doesn’t have major capacity additions coming up in the region.
Has seen cement prices being stable or going up in the region (http://www.deccanchronicle.com/151123/nation-current-affairs/article/cement-price-rs-70-bag). Note: I personally take such news paper articles with pinch of salt and better way is to verify the cement prices (or trends) on the ground as it is not much difficult to do so.
Has seen margins expanding.
Has been consistently reducing debt.
But if one says that in the light of all positive factors $ 44 is cheap then what is it cheap in comparison to? Obviously it is cheap in comparison to replacement cost per tonne which maybe around $ 120 -130/ tonne. But personally for small cement players to be on the safe side I would compare it with say $ 80-90 per tonne.
At a personal level there are many things which one considers to decide when to sell etc, which is difficult to put here. Say for example I am saying and feel that it is not expensive and decently priced but as a DISCLOSURE – I sold 1/3rd of my holdings in NCL today at 160+, the reason was not that I feel it is expensive but sold it ‘coz wanted to top slice my portfolio, as I had bought NCL at lower levels and it had reached 15% of my portfolio and I wouldn’t be comfortable with a small cement company becoming 15% of my portfolio.
Also at the same time I would like to remain in Cement as a sector right now (if I continue to feel favourable and improving demand scenario), but at a certain point I will move from NCL to a bigger cement player (say India cements with 15+ m tonnes of capacity). Buying NCL (or a view on Deccan etc), was a decision I took ‘coz I felt that undervaluation was a lot in these companies with certain factors improving (as stated above. Please note that I might have missed stating few other factors that I might have considered for e.g. technically also I felt stocks had bottomed out and most of the selling had been absorbed or EBITDA/tonne & EV/EBITDA or receivables cycle & working capital cycle, etc,. hence don’t consider the factors I stated as the sole basis for my decision making as I might have missed more than few).
Hence, in short, one needs to take his own call depending upon individual’s thought process.
Also please note that I think there is a risk of some kind of government action trying to reign in cement prices. Please be cautious of this factor apart from associated risk factors as these are cement companies with very small capacities.
Disclaimer – I am a novice & an amateur investor, hence please discount/ignore my views. Above are just my views and not a buy/sell recommendation. The calculations/numbers etc, are back of the envelope calculations and hence can be way off the mark as compared to actuals; therefore please do your own due diligence.
