Wednesday, December 29, 2010

Analysis of Parabolic Drugs Ltd

Introduction

[Based upon Company Website]
Parabolic Drugs Limited is one of the fast growing API (Active Pharmaceutical Ingredients) and API intermediate manufacturing and marketing company in the SME segment, with increasing international presence and a strong R&D foundation, based at Chandigarh, India.

Commissioned in 1998, PDL has two fully functional, state of the art manufacturing units, a WHO-GMP certified Unit based in Derabassi (Punjab) and a world class Semi Synthetic Penicillin manufacturing plant at Panchkula, (Haryana) with one of its products been approved for sales to USA, respectively. With Presence in over 45 countries, Parabolic Drugs Ltd emerges as one of the fastest growing Pharma Company.

PDL has a dedicated Custom Synthesis and Research & development Centre at Barwala (Haryana), fully equipped with latest analytical facilities and backed up with cGMP pilot plant for scale up of technologies and filing of DMFs.

Financial

PDL registered a modest growth of sales in Q2 FY11, as against that in the previous fiscal. Sales grew from Rs 128.84 Cr to Rs 147.45 Cr. On the other hand, the Net profit registered a tremendous growth from Rs 5.42 Cr to Rs 14.29 Cr. Operating profit margins have increased in this period. Equity capital has changed in the same period from Rs 10.75 Cr to Rs 61.89 Cr, thereby, direct comparison of EPS is not logical.

Monday, December 27, 2010

Patience and Value Investing

If value determination of a stock is the soul of Investing, then Patience is the heart, which will keep the "Investor" beating. Pateince can get you a multi bagger or convert that multi-bagger into a multi-loser. Warren Buffet has been quoted in the book "How to Pick Stocks Like Warren Buffett: Profiting from the Bargain Hunting Strategies of the World's Greatest Value Investor" by Timothy Vick, giving an example of the baseball player Ted Williams, having the seventh highest batting average of all time and the last man to average more than 0.4 in an entire season. Ted William says,
“To be a good hitter, you’ve got to get a good ball to hit.”
Along the same lines, to get a multi-bagger you should patiently wait for the right stock, at the correct value to make a buy and hope to make money out of it. Te patience part does not end at buying the right stock. The level at which you sell is also very important. Thus, if your stock is not doing well, you should still persist with it if you think you really have picked a value company, for in the coming time, the market will definitely recognize the worth of the company.

Wednesday, December 22, 2010

Analysis of Ind-Swift Ltd

Introduction

Ind-Swift Ltd is the formulations division of the Ind-Swift group which was incorporated in the year 1986. The company, over and above the local formulations business is also engaged in CRAMS (Contract Research And Maufacturing Services), a very lucrative outsourcing business for pharma companies in India. It also indulges in R&D to supplement the CRAMS as well as its own aspirations.

Financials

The Q2FY11 sales for the company stood at Rs 214.94 Cr against Rs 161.86 Cr in Q2FY10. Net profit is up from Rs 9.52 Cr to Rs 9.57 Cr, owing to pressure on profit margins. For H1FY11, the sales stood at Rs 393.34 Cr up from Rs 320.81 Cr for H1FY10. Net profit in the same period was up from Rs 18.17 Cr to Rs 20.58 Cr.

Analysis of Lupin Ltd

Introduction

Lupin Ltd is among the top 5 pharmaceutical companies in India, with a market capitalisation of Rs 20,000 Cr. What differentiates it from the other Indian pharma giants is its foray into the US market with a branded paediatric drug Suprax. With, the branded drug, they can boast of a bigger profit margin as compared to its Indian peers. In the coming year or two, Lupin is going to launch few more branded drugs, which increases its potential of growth in US.

With small acquisitions across the globe, viz Kyowa Pharma - Japan, Pharma Dynamics - South Africa, Multicare Pharma - Phillipines and Generic Health - Australia, they have obtained a toe hold in both emerging as well as developed markets, which they can leverage to their advantage.

Financials

Standalone sales for Q2FY11 stand at Rs 1073.09 Cr as against Rs 1009.36 Cr. This discounts the growth caused by the acquiations, which saw the consolidated sales growing from Rs 1114.69 Cr in Q2FY10 to Rs 1405.05, a growth of 26%.

At the same time consolidated PAT grew from  Rs 164.62 Cr to Rs 220.69, a growth of 34%, which shows an increasing margin.

Monday, December 20, 2010

Analysis of Compact Discs India Ltd.

About the company:

Compact Discs India Ltd is a leading player in the South Asian Animation Industry. Their major source of revenue comes from animation outsourcing projects. These animation projects (related to movies) are contractual and hence are not risky, but lack of any Intellectual Property Rights over it also reduces the scope for prolonged revenues.

In order to tackle that, they are coming up with two animation feature films "Eternal Love" and "Futebol with Pele". In the latter movie, Pele has been roped in as an executive producer. In March this year. Compact Discs has also inked a deal with BBC to co-produce a film "Blame It On The Bhangra". They have also reported having struck a deal worth $82 mn with a british production house to make an animation movie on Adolf Hitler.

The company also plans to come up with five animation degree awarding institutes, thereby foraying into the Education business.

Financials:

Q2 FY11: Sales at Rs 78.4 Cr, up from Rs 61.67 Cr in Q2 FY10
PAT Rs 16.87 Cr vs Rs 12.84 Cr in Q2 FY10

EPS for Q2 FY11 stands at Rs 17.62 vs Rs 13.42 for Q2 FY10

For the first half (H1) of FY10, sales were Rs 129.17 Cr vs Rs 105.88 Cr for H1 FY10
and PAT was Rs 26.96 Cr vs Rs 22.01 Cr in the same half last year.

Sunday, November 21, 2010

Investment versus Speculation

Today there is but a thin line that differentiates an Investor from a Speculator. According to Benjamin Graham - The Father of Value Investing -
An investment operation is one which, upon thorough analysis promises safety of principal and an adequate return. Operations not meeting this requirement are speculative.
The most important point of this definition is "Investment promises safety of principal and an adequate return".

Now take for example a Short seller. Is he now an investor or is he a Speculator? A short seller is one who borrows shares of a company and sells them with a hope that the prices of the shares will fall and he would be able to buy back the shares at a lower price and return them. The difference in the price is the return he gets. If the price of the share increases, he loses. Now where do you see any investment happening? Where is the principal he is investing and what is he investing his money in? What is the difference between this short seller and a punter betting on a horse who he feels will win?