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Posts tagged Value Pickr

Syngene International IPO – Views invited (09-09-2015)

@Vivek_6954

If venturing into commercial manufacturing is successful, then 5 years post start of commercial manufacturing, opportunity could be huge for this company.....It will not be right to put any number to it but one can gauge the size from the fact that industry itself is likely to grow in double digits in foreseeable future.

Getting associated with an innovator for NME takes atleast 8-10 years of trust building....forget here the high quality standards you need to maintain and multiple inspections that you need to clear not only from regulatory authorities but also from the innovator.

Just wait for Sep.'15 shareholding vivek, its not far away.....we might find good institutional holding in that shareholding disclosure. With rgds. to Columbia Pacific, you can find its details on https://www.columbiathreadneedleus.com ....its heartening to see the fund investing more than 3 % of its corpus in Syngene......the fund seems to be a long term investor with many bluechip names in its holding....

Rgds.

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Vakrangee (09-09-2015)

http://www.firstpost.com/business/cabinet-may-decide-on-automatic-fdi-route-for-white-label-atms-2426168.html

Already got nod for 100% FDI in white label ATMs, whats the impact with Vakrangee

Thanks

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Syngene International IPO – Views invited (09-09-2015)

@Mahesh I like both Syngene and Suven - both would be among my top 6-7 bets (if I was forced to take 6-7 bets). With Syngene, what I like more is that they are involved from discovery stage for many molecules. With Suven, what I like is that they have mind-blowing margins for CRM (ex their in-house research); inspite of their cash guzzling research, and assuming none of this fructifies, I still believe Suven is a very good business. If one wants to take the inhouse research into consideration for valuation, then I agree - Suven has no place in a concentrated portfolio. Syngene I feel is slightly overvalued at CMP, Suven is fairly valued.

@Vivek_6954 As Mahesh has mentioned, the 3 phases of clinical trials take 6-8 years, not even considering the discovery phase. So if a company enters this business today and if they get small contracts, the partner might see that they are doing good work after few years, but to build trust about privacy with the partner, and particularly in the industry would take a longer time. The other aspect is one would need to start with smaller number of scientists and increase as one gets more contracts. One can poach a handful of experienced scientists here-there but not a team as large as Syngene.

Q for scuttlebutt: How satisfied are the scientists at Syngene/Suven with their careers?

Discl.: No holding in Syngene or Suven. Recently sold off stake in Suven on realizing mistake that there is no MoS.

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Muthoot Finance: Undervalued quality stock on a turnaround? (09-09-2015)

Your book value erodes - when you engage in risky lending that ends up in capital losses.. Typically, if you have a history of riskier lending, then the market values you at lower P/BV....

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Syngene International IPO – Views invited (09-09-2015)

Mahesh,

Thanks for explaining the Syngene story in a lucid way.

Whats your take on Opp size & ROCE for the co?Will it be in an ever increasing model?

Are entry barriers so high that it will take a long time for competitors to creep in?

Any update on instl holding in the co ? who is this columbia pacific which bt 18 lacs shares on listing day?

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Syngene International IPO – Views invited (09-09-2015)

@srnarayan

Sreekanth.....As explained by me earlier in this thread also, Suven's business model is different....If I tell you frankly, in last many years I tried evaluating Suven thrice but every time I got turned down and decided against investing in this company....its not that there is any particular problem with the company but it doesn't suit my concentrated investment approach....As far as comparison with Syngene is concerned, I fond Suven's business model relatively more riskier as its majorly dependent on success of Suven's research and that too in concentrated therapeutic area.....no doubt success on that front could make it quite big but Suven's approach so far seems to be more of an outlicensing......also, I try to stay away from managements who make noise of every small small things in the form of press releases to stock exchanges.....otherwise industry feedback is not bad for Suven its just that it doesn't suit my investment style.....

Rgdg. MPS, it is getting attractive every passing day.....at less than 14 times organic FY16e EV/EBITDA the stock has reached extremely attractive valuation zone and one right move on inorganic front could significantly rerate the stock thats what I believe.....MPS seems to be in a sweet spot because of global turmoil which we all are witnessing...it has cash ready and it just need to spend it the right way without making any hasty decision....

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Screener.in: The destination for Intelligent Screening & Reporting in India (09-09-2015)

When we see the Annual results for some companies the screener shows Mar 14 as last year and some companies Mar 15 as Last year. Is this some kind of error? Some companies example listed below

Premco -Mar 14
Kaveri seeds -Mar 14
Ajanta Pharma -Mar 15
Poly Medicure -Mar 14

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Stock Anaysis Tool (09-09-2015)

This tool is very basic, rudimentary and qualitative tool only. Giving only 'Pass' or 'Fail' to each parameter is not going to give a crisper and clearer picture. How parameters like 'Company started by promoters' and 'dent on promoters' (just to take an example) would be defined and a pass/fail criteria would be applied. Better would be to list a set of criteria into three parts : 1. Quality of earning (profitability analysis); 2. Quality of Balance Sheet (leveraging, use of assets, etc.) and 3. Type of industry.
These three broad parameters with some sub parameters would give you a very detailed analysis for a stock.

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Sugar Cycles: 7-8 years of losses followed by 2-3 years of super gains! (09-09-2015)

There are many moving variables here. Let me try to list some of them here. This may not be exhaustive, kindly add to this list:

  • Sugarcane acreage & production- this is further affected by FRP/SAP, Cane arrears, prices of alternative crops, monsoon
  • Ehtanol mixing- Dependent on govt policy largely. Indirectly also affected by crude oil prices (lower crude oil prices reduces willingness of the OMCs to increase ethanol mixture)
  • Global prices- If the prices globally firm up, it can be an outlet for the excess sugar stocks of Indan mills. Global markets have excess supply of 5.5-6 MN tonnes as of last season. India accounts for almost half of this. The global market is largely dependent on Brazil as it is the largest producer in the world. To that extent production in Brazil is a key variable. Production in Brazil begins in April/May. As per this article of 2014 the farmers and mills in Brazil are under stress and they expect the production and crushing to be lower this year. Also the brazilian Real is a key variable. The same has depreciated over the last year or so, further depressing the sugar prices.
  • Govt measures of interest free loans/buying buffer quantity, import duty etc- some of these are more temporary measures which will not have an impact on sugar prices which is the key variable to look at/predict in my view.
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Sugar Cycles: 7-8 years of losses followed by 2-3 years of super gains! (09-09-2015)

Nice discussion here.

I have been reading up on sugar cycle in India and it seems that this season also there will a bumper production

http://www.agrimoney.com/news/indias-sugar-output-in-2015-16-to-stay-near-record-levels--8258.html

The main issue with the sector has been that the cane prices are still remunerative for the farmers to deter them from production, notwithstanding arrears from the mills.

The below is an excerpt from one of the sugar companies con-call

When do you see the cane acreage in India coming down? This is becausein the last four years we have not seen a significant decrease in the cane acreage beside the sugar industry going through a bad phase.

There is only one sign to look for. The historical sugar cycle has been based on cane arrears. Whenever arrears have exploded, you had the willingness of a farmer to move from sugar cane to other crops. If you look at the figure that I had mentioned on the call i.e on 31st of January 11,000 crore of cane arrears which will expand to 20,000 crore by the end of the sugar season is an astronomical number. That is the number at which one will see people moving away from sugar cane on an all India basis. Every State has different ramifications because different State Governments view cane price arrears in different manners. So that is the first sign to look at. The next thing of course is to look at the competing crops. Traditionally and I am speaking generally for the Country, the competing crops would be rice, paddy, and wheat. Now the prices of paddy and wheat have also suffered over the last couple of years. The moment you see any upswing in those prices, you will have farmers that will willing shift from Sugarcane to other crops

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