Laurus Annual Report|Beginning of a multiyear journey?

We have simplified it in such a way that even a 5th grader can understand Pharma terms in simple language

"Other guys read Playboy's. I prefer Annual reports.-By Warren Buffett

Link to the Video🔗: https://t.co/kaqCKKasVI

When in doubt, read the business again and revisit your thesis notes (checklist in my case)

Why Reading and observing different trends matter.

Time for a thread with a live example that is playing out in front of us! 🎵🎵

🧵🧵🧵🧵🧵

“What is elementary, worldly wisdom? Well, the first rule is that you can’t really know anything if you just remember isolated facts and try and bang ‘em back. If the facts don’t hang together on a latticework of theory, you don’t have them in a usable form.”- Charlie Munger

Charlie Munger who is the partner of Warren Buffett, has over the years explained the importance of creating a latticework of mental models. That is basically combining theory with live practical examples

One of the most interesting mental models he talked about in his books was that of Autocatalysis (lets understand this and how we can apply it to a live example):

"Disney is an amazing example of autocatalysis. They had all those movies in the can.

They owned the copyright. And just as Coke could prosper while refrigeration came, When the video cassette was invented, Disney didn’t have to invent anything or do anything except take the thing out of the can and stick it on the cassette.

Forget the Quant&Algos who entered last week and drove the volumes. For a long-term investor, today's concall was music to the ears. Effectively the intrinsic value expands as we take pains in the short term to grow even better in the long run🐶🐕🎵

Sequent 2.0+ by 2025 🎥🎥

A word of advice and caution. When you buy a High Pe stock. Make sure that you are very certain about the growth. Plenty of good and bad examples

Eicher=Growth stopped, Got derated.

Pi Industries= At 52+Pe in 2015, growth continued (5bagger since then)

Symphony=Growth stopped as more competitors copied them, painful time correction.

Astral=Kept growing and entering newer adjacencies since 2015 when it was at 60+ Pe. (Been a 10 bagger since then)

Page Industries=Growth stopped as the company matured. No returns for last 4 yrs.

Bajaj Finance= Kept growing (barring Pandemic). Kept rerating with the earnings growth.

HDFC Life=Been absurdly valued since 2018. Leading to very poor returns.

Relaxo=Kept getting rerated on back of earnings growth.

High Pe means market is expecting strong earnings growth. What happens when it fails to come? Likely derating or painful time correction.

Paying a high multiple, you need to make sure that the growth is certain.

What I do to grasp such opportunities or to ignore them is to have a mix of deeply valued companies (like some financials I own) with Companies where I think they will grow at 30-35%+ (Navin).

This is what my framework is:-

Pf=High Pe+Already seen value+Strong earnings growth

What is a Qualified Institutional Placement and what do I like about them (more to do with the QIP doc)

Time for a thread🧵🧵🧵🧵🧵🧵

What is a QIP?

A QIP or a Qualified Institutional placement allows a company to raise capital by issuing securities (by diluting equity) only to institutions.

Only Qib's or Qualified Institutional Buyers can participate in QIP's. This includes Mutual Funds, Foreign institutions

and Pension funds etc. (From my knowledge PMS' or any individual investor cannot participate in Qip's).

Just to give you an example:- Look at the investors who participated in the QIP of Saregama (750 crores)

Another example is the Qip of Deepak Nitrite in 2016 for the Phenol Project (size of the project was 1400 crores+)

The QIP witnessed participation from some of the top domestic institutional investors namely Reliance MF, Birla MF, ICICI Pru MF

Question arises, Why did SEBI allow for creation of QIP as an instrument for raising money?

QIP was introduced in the Indian Markets in 2006 by Sebi. As the regulator was concerned that the domestic companies were getting too dependent on raising money through

Laurus Labs - ⭕️⭕️⭕️

still no selling whatsoever. A strong point to accumulate further as the risk is minimum. at 20 EMA. Selling candles have fewer volumes.

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

#LAURUSLABS
close abv 708 SL 592 on closing basis for 1769
#Relativestrength #outperformance #investing #india
#AhmedabadNest

close abv 708 will trigger super pattern
institutional holding increasing icing on the cake

Does #LaurusLabs makes good investment bet at current