Yes, this is an excellent company with a strong domestic franchise. Valuations are very attractive. Growth is steady. Debt free. Asset light. Prudent management. No dilution ever. Margins increasing each year.
I would say Jenburkt has a huge runway ahead. Probably will see 4 digits in a couple of years.
Disc – Holding and vested.
Neil
Hi Hitesh, what has been the issue with color of the tablets ?
Has anyone looked at Jenburkt recently. Reminds me a lot of Anuh Pharma. But with higher EBITDA margins
— Market Cap Rs211crs
— RoEs of 30%+ for the last 5 years
— Net cash company)
— Pays out 30% of profits out as dividends
— Trading at FY15 P/E of 23x. 1HFY16 PAT is up 29% YoY
—83% of business is domestic and 17% is exports.
I have used a couple of its products namely powergesic gels and tablets and one derma product. Very effective products.
I bought a small quantity for tracking purposes.
From what they say, looks like a very differentiated play and so not sure why they are not able to scale up the volumes.
Do any of have a ppt explaining the industry scenario – i.e. size, competitors and strengths? I have been trying to talk to them, but haven’t been too successful.
Cheers,
An outstanding Q2 given the conditions. CLSE’s focus on speciality products has resulted in a significant expansion of margins. This year 2015-16, they will end up with an eps of around Rs.45.
I think next year will witness an increase in their topline as well. I think volumes have already started picking up, but given the lower basmati prices, this really doesn’t reflect in their topline. Additionally, they are setting a target of Rs.100 crore in the Indian markets alone and plan to reach there next year.
All in all, a good buy even at current levels.
Interesting thing is Innovator (AstraZeneca) still has 60% market share despite Teva launching the generic in January, 2015. Torrent management also stated in the concall that its a high volume product and they are targeting high single digit market share. The withdrawal of DRL and Hetero from Nexium market might also result in higher pricing for the near term. Also, it might help in Torrent getting higher market shares and getting inroads in the some of the pharmacy retail chains.
Hi. Adding my two penny bit again 
I don’t think one can look at certifications and approvals as a moat. These are requirements as part of a bidding or regulatory process which most companies in the sector will have or need to get in order to compete and sell effectively.
Think of it this way – Pharma companies wanting to sell in the US market need to have in place USFDA approvals, this does not mean that they have a moat, or that these approvals can act as a moat.
‘Moats’ in my much uninformed opinion is a term that is being over used today – it is important yes, but more so in a commoditized sector/ industry, think Kitex/ ACM?
In this particular business the investment rationale/ decision has to be based more on the size of opportunity, the positioning of the company in relation to the opportunity and how management is looking exploit the opportunity in the years ahead; in terms of launching new products, looking to drive scale in manufacturing and distribution, entry into new markets and marketing efforts (of which these approvals are a part) etc.
Whether or not current price reflects value is something I reserve my opinion on.
Disc: Invested
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Ya, you did mention earlier. I was trying my luck. I do not know anyone in Delhi.