Category: Company Updates

Neuland Labs – Forging Ahead

Last year we did an opening note on Neuland Labs and how the company is moving up in Pharma value chain, The company recently announced its full year revenue and the results are inline with our expectations

CMS segment outgrew other segments and now has ~28% share of total revenues up from ~26% last year, overall all segments had a good year with topline growing by more than 20%

If you peek under hood even more positive aspect was growth of development projects in CMS segment as they move from development to commercial stage the growth could sustain

Source : Investor Presentation

Margin trajectory is also in right direction, management indicated in concalls that they had some one offs in Q4 and are still in investment phase for Unit III

Updating our last year expectation vs Actuals
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Suven – A New Beginning

The first thing that striked me as long term follower and investor in the company is the subtle sense of courage, aspiration and pride communicated by management when I was reading their annual reports

Yes there are two reports this time. In this post I will discuss Suven Pharamaceuticals and then will do a subsequent one on Suven Life Sciences. I have covered the company extensively and if you are new to the company then there is plenty of reading material here

Performance

The company has stopped given breakdown of research projects in various phases and prodding in concall also didn’t help to get this information out from management. This was a very interesting piece of data and as it provided us insight on their product mix. Also company has merged CRAMS revenue with Commercial Supplies so they are not available as seperate figures like last year

 

Segment (INR Crores) 31-Mar-2019 31-Mar-2020 Growth
CDMO 379 468 23.48%
Spec Chem 216 304 40.74%
Technical Services 50 70 40.00%
Total 645 842 30.54%

Rest of men dislikes visiting a physician first before ordering Kamagra Checking expiry date viagra india prices on the pack and also take necessary precautions. After all, IEP … Read the rest

Idea update & Ashiana AR Markings

Ashiana is a perfect example of a good company caught in an extremely difficult external environment. The industry was facing a slowdown and COVID is going to give a death blow to many, given their balance sheet they will survive but as Investors best is to forget that you own stock for the next 2-3 years.

My highlights from the Annual report can be accessed here
 
PS – Evernote highlights are best viewed on a desktop

Portfolio Addition

 … Read the rest

CERA Sanityware – All’s well?

In my last update to you in 2017, I had pointed out that the Important variables to track for this company are

  1. Topline growth
  2. Return on Capital not impacted due to tiles expansion – Currently, it is about 30%
  3. New business growth
  4. No further declines in PAT margins (Somany’s margins are low – Pure Tiles player)
  5. Continued investment in branding and promotions

Let’s revisit all of them

  1. Topline growth has de-grown for the first time in many years in Mar 2020, management indicated in call that this was due to COVID lockdown in the last few days in March, the overall quarterly trend for last 2-3 years is also not inspiring

2. ROCE is steadily declining from ~30% to ~25%, part of the blame is tiles division, the other part is excess cash retained in the business (INR 230 crores)

3. Tiles business has grown from INR 170 cr topline to INR 265 Cr from 2017 to 2020 and they have added a new category called Wellness which caters to high margin audience

4. PBT margins are stable as per the above graph

5. These expense has been trimmed down and the company indicated in concall that  they can save … Read the rest

Annual Review – Piramal Enterprises 2019

In last four years, the business mix of Piramal Enterprises has changed completely

 

 

With financial services forming lion share of top line and bottom line.

Right from start, the decision to invest in Piramal Enterprises (as well as Thomas Cook) was to ride with smart managers who have a fantastic long term record of creating wealth. 

Coming to FY19 business performance

Financial Services

The NBFC sector was impacted by a liquidity tightening situation, triggered by default by IL&FS and further worsened with defaults by large corporate groups like ADAG and ZEE. The adverse environment led to reducing the growth loan book grew 34% y-o-y to ₹56,624 crores.  For any financial services company, it’s easy to expand loan book however the key is to maintain quality of loan book and ensuring there is no Asset-Liability mismatch. On both fronts, till now Piramal has done well. The NPA has been below 1% and across time zones the company has sufficient liquidity to match outflows.  At the company level, they have diversified their book from wholesale lending to retail lending which is now 71% of their book compared to 83% in FY 2015. The management indicated that this further improve … Read the rest