Thursday, January 31, 2013

PANACEA BIOTEC - UPDATE

In my last Saturday's posting on Panacea Biotec( HERE) ,I have mentioned about the interest of Serum Institute of India in Panacea .Today Serum Institute again bought 3,08,416 shares from open market.

Monday, January 28, 2013

TCPL PACKAGING - RESULT UPDATE

I have recommended a BUY on TCPL Packaging @ Rs.55 on November 11,2010 ( For old posting click HERE) .Today company declared its December quarter result where its Sales improved from Rs.78 Cr to Rs.95 Cr and net profit more than doubled. At CMP of Rs.71,still recommending to HOLD.

Saturday, January 26, 2013

PANACEA BIOTECH - WORST IS OVER







Panacea Biotec was darling of Investors till 2008 .This is the first  pure biotechnology based pharma company listed in Indian stock exchanges in 1996. Company along with its subsidiary Chiron Panacea  is the second largest vaccine maker in India next to Serum Institute of India. In addition to vaccines  company also present in formulations. In the formulation segment company concentrating in pain management, cardiovascular disorders, diabetes management and organ transplant. Company having a strong R&D with more than 200 scientists and it introduced many ‘firsts’ in India. In the vaccine segment company introduced vaccines for Polio,H1N1 and Hepatetis B and company’s products were best sellers in the past. Its misfortune starts with the banning of its many vaccines by WHO . The combination vaccines EasyFive, Ecovac4 and EnivacHB were de-listed by WHO  due to some quality issues found during their routine inspection. This issue noticed in bulk drugs sourced from one of its subsidiaries  PanERA Biotec for manufacturing final products .Due to this issue company disqualified from supplying these vaccines to UN’s world Health programmes .For the past many years about 40 % of company’s income was from WHO supply and Easyfive was the highest margin product for the company. Due to this setback ,in the past few years company concentrated in other segments to develop their business . Last year company started a new production unit in Baddi ( Himachal Pradesh) exclusively for manufacturing medicines for oncology segment. During September 2012 ,company signed an agreement with US based Osmotica Pharmaceuticals for developing high entry barrier generics and branded formulations for US market. ( Interview of MD on this subject  HERE).During November 2012 Company signed another similar agreement with Kremers Urban Pharmaceuticals Inc (subsidiary of Belgium-based UCB) and launched its first product ‘Tacrolimus Capsule’ in US market. In a strategic diversification into related fields ,Company is going to start a hospital –Panacea New Rise Super Specialty Hospital – in  Gurgaon.This facility is expected to start full fledged operations  during the first half of 2013.



Now company claiming that they have sorted out all quality related issues connected with their vaccine facility . After a long gap of many years, in December 2012 company received a Rs.182 Cr order from Government of India for supplying Oral Polio vaccine. This order will be executed between December 2012 to May 2013 period .In an important development , now it is known that the WHO delegates will again inspect company’s facilities by next month. There is every chance to enlist company again in WHO ‘s qualified suppliers list ,post inspection. If it happens it will be a game changer for the company. Promoters are holding close to 75 % stake in its  Rs.6 Cr equity company and not pledged a single share so far. It is an interesting point to note that ,ever since its share price started its down trend in October 2008 ,India’s largest vaccine maker and Panacea’s arch-rival  Cyrus Poonawalla led Serum Institute of India acquiring Panacea’s shares from open market . Serum Institute’s stake in Panacea Biotech  increased from less than 4% in 2008 to the highest level of 13.39 % in latest September quarter.They started accumulation even at a price range of Rs.220+.I believe ,this is clear indication that even the main competitor who know the industry very well is fully  confident about the come back of  this company in near future .I think worst will be over for the company by this December quarter result . Since its floating stock is very low ,there is every chance for sharp appreciation once it back on track.It is a high risk high profit kind situation ,hence suggesting only for those with high risk appetite.Stock listed both in NSE and BSE and trading around Rs.108/-


 Link to Company website HERE

Link to latest annual report HERE

Disc : I have vested interest in PBL 

Thursday, January 24, 2013

GRANULES INDIA - RESULT UPDATE

Granules India reported a 5% increase in Sales and a 27 % decline in net profit for  December quarter . Even the profit was below expectation ,today's sharp decline in stock price seems an over reaction and part of over all negative sentiment visible in small and mid cap stocks for the past few weeks. Expecting an improvement in company's performance once it completed ongoing expansions and achieving stability in operations.Those having a capacity to hold  minimum one year can still hold the stock and even add in a staggered manner if it falls below Rs.130/-

Wednesday, January 23, 2013

VIKRAM THERMO - BOOK PROFIT

I have recommended a BUY on VIKRAM THERMO @ Rs.25 on 19 June  2011 .( Old posting HERE) .Now it is trading around Rs 64  /- ,an appreciation of 165 % in 18 months .Recommending to book profit at current market price.

Tuesday, January 22, 2013

HERITAGE FOODS LTD - RESULT UPDATE

This stock initially recommended as a buy below Rs.200/- , ( Old posting HERE) which is currently quoting around Rs.525 , reported December  quarter result as follows:





 Still recommending to HOLD.












Saturday, January 19, 2013

PANAMA PETROCHEM LTD - BUY




Panama Petrochem is an Ankleshwar based manufacturer of specialty oil products promoted by Rayani family.Company having five manufacturing units in India located at Ankleshwar, Daman, Dahej,Marol and Taloja .Its total capacity is 105000 MTPA  for more than 80 products together.Recently company started a subsidiary in UAE - Panol Industries RMC FZE. Petroleum Jelly,Liquid Paraffins,Rubber Processing oil,Transformer oil,Cable Jelly,Knitting oil ..etc are companies major products.These products are widely used in industries like Cosmetics,Pharmaceuticals,Electrical,Cable Manufacturing,Textiles..etc.  Company selling various branded products for these industries.Panama Petrochem tied up with Germany based Lubcon Lubricant Consultants for developing new oil based products.Crude derivatives are the main raw materials for the company and the current  stability in crude price will help the company to protect its margins.Even at the time of higher crude prices,company successfully hiked its product prices to protect its margins to a certain extent.Now, many countries are exploring  opportunities to start/increase shale gas/oil production.This efforts may act as a check for sharp spike in crude prices going forward.

                                                      For the FY 2012 company reported a Sales of Rs.583 Cr and a net profit of Rs.31 Cr .On a small equity of Rs.8 Cr FY 12 EPS was Rs.39/- . Company is very liberal in dividend distribution too which paid 50 % each in past three years. It is almost a debt free company with a book value around Rs.260 .After hitting a 52 week high of Rs.250, now this stock is trading around at  its  52 week low price. Considering promoters’ experience in this industry ,expansion plans ,stability in raw material prices ..etc  recommending a  BUY @ CMP Rs.135/-

Link to company website HERE

Link to latest Annual Report  HERE

Saturday, January 12, 2013

AARVEE DENIMS & EXPORTS LTD - BUY




 



 









With a market share of 12 % ,Ahmedabad based Aarvee Denim is the second largest manufacturer of denim fabrics in India. Company having three manufacturing units in and around Ahmedabad. Company increased its production capacity by 40 % in last financial year, thus the current capacity stands @ 80 million meters per annuam.Denim prices are currently going through a consolidation phase after some sharp spike in past few quarters. On the other side cotton prices showing weakness which is expected to increase the margins of denim exporting companies. Weakness of rupee is an added advantage. Due to the reduction of Chinese export to International market ,large Indian denim exporters increased their market share in recent times. Other than export ,company selling branded products under three brands - De Extase,Fashion Wrapper and Aden. Size of branded retail operations are limited currently but company planning to open more stores in future. In the financial front too Aarvee Denim exhibiting good performance. For the last September quarter company reported a net profit of Rs.17 Cr v/s Rs.4 Cr .In last FY ,company bought back half of the issued FCCB’s .The current trend in denim and cotton price is expected to continue for some more time ,hence recommending a BUY on this stock  for medium term .Keep an eye on the price of raw material in local market and price of end product  in International market .Currently stock is trading in both NSE and BSE around Rs.76/-


Link to Company Website HERE

Link to Branded Retail HERE

Thursday, January 10, 2013

BAMBINO AGRO INDUSTRIES LTD - UPDATE






I have recommended a BUY on Bambino Agro Ind.Ltd @ Rs.40 on 13 October 2012.Today  stock closed around Rs.68 ,near to its 52 week high.Even there is an increase of 50% in sales ,due to sharp increase in WIP / Stock in trade company reported a marginal loss in last September quarter .After a long gap of 15 years company distributed 15 % dividend recently.Now company introduced many new products to its product list and started to market it very aggressively on a pan India basis.Even the history of promoter is not very investor friendly,their recent efforts to scale up the business and share the profit with minority share holders giving some hope.As you are aware ,  investors interest is very high for good branded companies especially in packaged food sector.BAMBINO having very good brand recall across southern states and now they entered into northern markets too.Company having a turnover of Rs.200 + Crore and an equity base of just Rs.8 Crore .Out of this Rs.8 Cr equity promoters holding is too high @ 75 %,which means very low floating stock.If the promoters are willing to drop their laziness and take some bold steps to reduce debt ,there is everything in this stock to become a multibagger. For investors with some risk appetite still recommending to HOLD the stock.

Link to company website HERE

For old posting click HERE

Disc:I have vested interest in BAIL

Wednesday, January 9, 2013

CHOLAMANDALAM INVESTMENT AND FINANCE - BOOK PARTIAL PROFIT

I have recommended a BUY on CHOLAMANDALAM INVESTMENT AND FINANCE ( Formerly - Cholamandalam DBS)  @ Rs.82 on 8 March 2010 .( Old posting HERE) .Now it is trading around Rs.290 /- ,an appreciation of 350 % in 3 years.Recommending to SELL  30 % of the original quantity and HOLD the remaining  as cost free.

Tuesday, January 8, 2013

NBCC - BOOK PARTIAL PROFIT

I have recommended a BUY on NBCC @ Rs.95 on 18 April 2012 .( Old posting HERE) .Today stock hits its life time high  @ Rs.194 ,an appreciation of 100 % in nine months.Recommending to SELL  50 % of the original quantity and HOLD the remaining 50 % as cost free.

Saturday, January 5, 2013

BANARAS BEADS LTD --- ENDING DISPUTES ,EMERGING OPPORTUNITIES ....







There was sharp appreciation in the price of gold in past few years.This is mainly due to a shift in asset allocation by individuals and countries in favor of gold at a time of financial turbulence around the glob.This unstoppable increase in gold prices forcing lower class and lower middle class people to look into cheap alternatives for the purpose of making ornaments / jewellery .This is not the trend only in our country but in many other places too.This situation improving the potential of another business – Imitation Jewellery. Beads is an important part of this business.This business is dominated by unorganised sector and there is only one listed company from this space – Banaras Beads which is manufacturing in manufacturing and exporting  glass beads, imitation jewellery and other similar products.Banaras beads came out with an IPO in 1995 with a premium of Rs.75 per share. Thereafter there was some serious disputes between the promoter family members which ends in a series of court cases and intervention of company low board ( CLB).Trading of company’s stock suspended from stock exchanges from 2003 to 2011.During this period company’s growth severely affected  and no dividend distributed.Now company almost  settled the  disputed and cancelled the allocation of about 30 lakhs shares issued to a group of family members according to the direction of CLB. From a turnover of Rs.15 Cr in 2007 company grown to a Rs.35 Cr in 2011-12.Now BBL is planning to tap the opportunities aggressively by expanding its design and production facilities ,finding new export channels ,entering into new territories  ..etc.At present company exporting its products to about 60 countries including USA, Africa, Europe and Arabian countries.Company is now adding another 75000 Sq Ft facility ta Varanasi which is expected to complete in another few months.Recently company launched fashion jewellery items under the brand ‘De-Lemon’  and also launched an online shopping portal for Fashion Jewelery & accessories ( Link below).Even this industry is dominated by un organized players ,company’s like BBL having advantage of most modern designing facilities,adoption of contemporary styles,Image of brand ..etc. .FY 2011-12 was company’s first full year post re-listing .In FY 2011-12 ,BBL reported a sales of Rs.34 Cr , net profit of Rs.4.75 Cr and an EPS of Rs.7.10.Another point to note is its dividend pay out .Last year company declared a dividend of 40 % .On the basis of current market price this  provided  a dividend yield of 10% ( tax free) .I believe this was one of the highest dividend yields last year.We can’t guarantee this will repeat in future but there is possibility for the same since company is expected to complete this FY too with similar level of profit. Since company is running near its full capacity ,performance is expected to improve further  with the functioning of new facilities by next year. End of long dispute at management level will help the company to concentrate in business from hereon and demand scenario for imitation jewellery is expected to pick up further.
                                                     Even this company’s stock listed in both stock exchanges it frequently traded only in BSE .Because of this low liquidity ,it is only suitable for those like  high risk high profit kind bets and not for average risk takers.Invest only a very  small portion of your corpus in these kind bets.BBL is trading at a price close to Rs.40 /-

Link to Company's online shopping portal HERE

Link to Company website HERE 

Link to latest Annual Report HERE 


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