Beautiful image. Lets find the companies which operates across the horizon.

Why #JubilantIngrevia can be next big growth story?

Here is the thread.

Pharma serving to regulated market are under stress due product price erosion. Market is comfortably giving higher multiples to step down segment in value chain i.e. raw material suppliers.

eg. Alkyl & Balaji Amine. Very few Pharma are growing well. But again, they can’t grow in isolation as the question is what makes them so special other than promoters? Stagnancy is imminent after certain size.

Hence investing in Raw material supplier (KSM) companies’ de-risk your portfolio. They don’t deal directly with FDA. End users (Pharma players) can’t afford to lose them due to regulatory issues and delays due to vendor switch.

KSM producers has multiple buyers & applications of their products hence don’t get affected if any one pharma finds price erosion. KSM business is mostly bulk scale, hence there is less risk to them from their peers, its tough for new players to reduce the cost further.

Though over the longer run prices goes down by extensive research & new processes.

Jubilant Ingravia has posted superb Q1 numbers which fetched my attention. Stock is trading below one year forward 15x PE multiples & 2x of sales.