Gufic BioSciences – Stock Analysis

Gufic BioSciences stock has delivered 20x returns in the last 5 years. This multibagger stock is on the radar of many investors and is a common name in high growth screens. The stock has corrected by ~47% in the last one year. However, in the same period the revenues and profits have consistently grown. Does the recent correction offer a good chance to invest in the stock for the long term? Gufic BioSciences Business The company was established in 1970. It has a presence in the pharmaceutical space with it’s products ranging from API’s to bulkdrugs and personal care products. The company is also into the business of contract manufacturing. The promoter holding has reduced from 69.98% in Q2FY18 to 65.75% in Q3FY19. Revenue Breakup The share of consumer business has gone down to ... Read Full Article

January 2019 Newsletter

<This is an extract from our January 2019 newsletter to clients> Investor Behavior – We won’t sell at a loss In the current market conditions, there are times when we must exit positions at a loss. There are periods when we book profits consistently and then there are periods, when we exit many positions at a loss. When we give exit calls, a few investors do not exit the positions. They exit some, they hold the balance for the cost price to come. This is not the best habit to have as an investor. There are reasons why we exit a position, if we knew that the cost price would eventually come back, we would not exit! We would instead add more and hold. The problem is that investors do not take a bird eye view when it comes to looking at the portfolio returns. They look at the return... Read Full Article

Cheviot Company – Stock Analysis

We recently came across Cheviot Company in our smallcap radar. The company’s promoters are the Kolkata based Kanoria family who hold a 74.99% stake in the company. The family has varied business interests in the tea, jute and leather sectors. Cheviot Company Business Cheviot Company is primarily in the business of Jute. The company has 2 plants which are located in the 24 Parganas (South) district of West Bengal. Under Jute Packaging Materials Act of 1987, it is compulsory to use 100% jute bags (before November 2018, this was 90%) for packing food grains of consignment size of 10-100 KGs and 20% of jute bags for packing sugar consignments of 25-100 KGs. Exports contribute ~ 35.5% of the revenues as per FY18 numbers. The export revenues are stagnant since FY12, thus the % share of rev... Read Full Article

How to invest Rs 5000 per month

Invest Every Month The benefits of investing every month in a systematic way are many. It makes you more disciplined, it helps you take advantage of market volatility, it is a lesser burden on the pocket, etc. The most common amount that a middle class person wants to invest now days is Rs 5000 per […] Read more ... Read Full Article

IOL Chemicals Stock Note

IOL Chemicals and Pharmaceuticals Limited IOL Chemicals was established in 1986. It is headed by Varinder Gupta (Chairman and MD) and Vijay Garg (JMD). Rajinder Gupta, one of the co-founders in 1986 is now the promoter of Trident Ltd. The company derives it’s revenues majorly from Ibuprofen API and Ethlyn Acetate. In FY18, bulk drugs contributed 63% of the revenues, while in FY17 this share was 56%. IOL Chemical has a presence in more than 50 countries across the globe. Notes Ibuprofene is a drug that is used to treat pain. BASF’s Texas unit which had a 5000 TPA Ibuprofene API capacity was shut down in June due to technical reasons. Ibuprofene API has an annual demand of ~ 35,000 TPA globally. However, even before BASF’s unit shut down, the Ibuprofene API supply chain was... Read Full Article

Q3FY19 – Portfolio Performance

Market Snapshot The Nifty posted positive returns on a year-to-date basis in 2018 while the midcap and smallcap index saw a deep correction. The earnings growth remained in single digits and the PE Ratio continues to trade at expensive levels. Nifty 2018 Snapshot Most of the retail investor’s portfolio was in midcap and smallcaps. This is where the pain was in 2018. A lot of stocks had corrected by 50% (Read: Sentiments – Market correction and more) and popular names have trapped investors. Portfolio Performance The Alphamultiple portfolio rose +0.67% for the quarter. We outperformed the Nifty 50 TRI but under-performed the mid & smallcap TRI. On a YTD basis, the Alphamultiple portfolio fell (9.04%). We maintained high cash positions in the portfolio throughout the year a... Read Full Article

PVR Ltd Stock Analysis

In this blog we analyse the PVR Ltd stock. PVR (Priya Village Roadshow) operates India’s largest multiplex chain. It has ~ 625 screens in 134 theatres across 51 cities. The company has a 40% share of the Hollywood screening and 25% share of the Bollywood screening in India. Industry India is the 5th largest box office market in the world, just behind UK. India is set to overtake UK and Japan soon Hindi movies alone contribute ~ 40% to India’s box office collection. The exhibition space is still dominated by single screens although their share is reducing sharply. Single screens and Multiplexes generate 50% each of the total sales. However as ~ 400/500 single screens are shutting down every year, multiplex chains would become the major contributors. Single screens are decreasing... Read Full Article