Key insights from Hikal

🧪 Lowered interest rates
🧪 Pharma: Growth in generics as well as CDMO
🧪 Crop Protection: Scaleup of a fungicide for a Japanese CDMO client
🧪 Healthy pipeline of new products: Supported by new capacities; Investing in Animal Health & Biocides verticals https://t.co/D70j9oriCa

Automotive Ancillaries Business Model 🏎️ (RT if beneficial)

A Thread 🧵👇

1/ What is an Auto Ancillary?

Well, a modern car requires 10s of thousands of parts; the OEMs that produce these cars don't make most of the components in-house. That's where auto ancillaries come into the shot.

From Seats to locks to braking systems, we have them all.

2/ Sounds simple, right?

Not really, the supply chain management one has to deal with as an OEM is extraordinarily complex.

The technical know-how required in every part of the chain is unique; leading to focused players with high market share.

3/ Auto Ancillaries with 20%+ market share in India or 5%+ market share Globally (Src: @Tijori1)

See, normally market share consolidation is common with time; Why is it so?

4/ High capital requirements: What makes this a moat is also why this biz is gruesome.

You as an ancillary, do the development today, you put the capacity today (~take multiple years); then wait on the hope that OEMs are able to sell vehicles. Now, Imagine a recession.

Sequent is down 60% from its highs. Let's understand how their business is faring (by @AnishA_Moonka )

A thread 🧵👇

1/ How do businesses happen? Do they just crop up the day when an entrepreneur thinks of it? Do they become bigger as the stock reaches new highs?

I guess, No. It takes time, It takes labor. Again, Will the ascension be smooth? Never.

The journey of Sequent in the last 5 yrs:

2/ Pre-FY15: Sequent was merely a commodity high volume low-value API player

Due to this intrapreneur's (Mr. Manish Gupta) efforts that we see Sequent as the only USFDA approved generic animal player from 🇮🇳

Behind the deals of Strides Agila plant & the Australian business.

3/ The transformation speaks volumes of how such a businessman thinks.

In 6yrs of existence, he has taken the unknown co. to be among the Top 20 in the world.

Now, he is taking a long shot to enter the Top 10 over the next decade (aka. Sequent 2.0); A tall task.

4/ If he is dreaming big & has executed in the past with industry tailwinds; the common question is why is the stock down by so much?

Probabilities: Investors went from a high probability of success to a low in months as multiple obstacles (short term?) hit the co.

HDFC AMC FY21 Annual Report Takeaways

'We are the fiduciary to our customers – their interests clearly supersede'

Hit the 'retweet' & help us educate more investors

A thread 🧵👇

1/ What has helped HDFC AMC to grow this large?

The Trust associated with the HDFC brand.

A one-stop shop for individuals, families, corporates, and institutions when it comes to their investments.

The most profitable Mutual Fund.

2/ Promoters continue to own 73.9% in the company:

52.7% by HDFC Ltd & 21.2% by Standard Life investments.

3/ Numbers that matter

Rev up 3%
76% EBITDA margin
Pat up 5%
AUM up 24% to 3.95 Cr (43% Equity, 39% Debt, 16% Liquid) | PMS & big accounts at 9.7K Cr
53 lakh investors
1254 employees
Digital transactions: 82% of total
13.7% market share in MAAUM & 12.6% in total AUM

4/ Product Portfolio

In Equity, will increase the diversity in their investment style & approach: have faced the brunt of underperformance in the past | 24 schemes

Debt schemes were able to tide through the tough phase of defaults by a large NBFC & HFC, COVID-19 | 68 schemes

Laurus Labs FY21 Annual Report Takeaways 🔬

'Capex plans are already under way to increase capacity by 1.8x by 2022'

Hit the 'retweet' & help us educate more investors.

A Thread 🧵👇

1/ About the company:

Leadership position in generic APIs with a major focus on Antiretroviral drugs, Hepatitis C & Oncology drugs

FDF: Moved up the value chain in formulations

Synthesis (CDMO): KSMs, Intermediates & APIs to pharma innovators.

Bio: Recombinant products

2/ Strengths of the business:

Robust R&D & Process chemistry skills
Compliance that meets the most stringent regulatory expectations (USFDA, etc)
Long-standing relationships | Top 10 global pharma cos. catered

750+ scientists (R&D) | 61 DMFs | 27 ANDAs | 150 patents (292 filed)

3/ APIs: 54% of rev

- Leaders in various high-value & high-volume APIs.
- 4 high potent manufacturing facilities: 4186 KL, increasing capacity by 24% (Strong demand)
- ARV APIs were up 70% | Onco APIs up 25% | Other APIs up 56% (higher contract manufacturing orders from 🇪🇺)

4/ Formulations: 35% of rev

- Backwardly integrated: in house APIs
- Sales to LMIC, 🇺🇸 & 🇪🇺
- 27 ANDA filled: 9 approved+ 8 tentative.
- Capacity of 5 Billion units/yr, Increasing capacity by 100%
- Sales up 102% (growth across markets)
- Launched TLE 400 in the LMIC market

HIKAL

Double Top Buy triggered above 554.72 daily close on 1% Box Size chart.

#hikal Undergoing a Volatility Contraction which can be appreciated in #Renko chart
#PnF next DTB gives a very favorable R:R entry
@Definedge
#NSE #StocksToBuy #StockMarket #stockstowatch #Nifty #trading