Updates on RAIN, CIPLA and Noble Explochem
1.RAIN INDUSTRIES LTD Rs 47/
2. CIPLA Ltd: Again we have proved right with our estimates for Q1 bang on target.
Q1/FY16
Sales 3776
PAT 651
Eps Rs 8.10
1.RAIN INDUSTRIES LTD Rs 47/
RIL has declared same results for Q2 as estimated by us. Q1 PAT has jumped QoQ 71.70%. H1 PAT stands higher by 32%. RIL has also announced interim dividend of Re 1 i.e. 50%. Co likely to declare similar dividend by year end.
For CY15, RIL can report Eps of Rs 14-16. Stock is trading at just 3.15 x CY15 Eeps. Amongst large-sized midcap stocks, RIL is the most undervalued stock. There are 3 big big triggers in the waiting. RAIN IS OUR TOP PICK in segment of midcap stocks. In midcap segment, Rain should deliver highest appreciation in CY16. We recommend to invest large sums in Rain as your wealth should more than triple in next 12-18 months.
Q1/FY16
Sales 3776
PAT 651
Eps Rs 8.10
Q1 PAT has risen 150% QoQ basis, risen 120% YoY basis and higher by 42% even on Bloomberg estimates. Such blow-out quarter was helped by a combination of Nexium (where profit margins reportedly in excess of
65%) and strong growth in base(25% yoy) which drove EBITDA margins upwards to 27% despite continued increase in R&D and staff costs.
Pulmicort Respules will help sustain the growth momentum in 2HFY16. Investors will see seveeral levers for growth from FY17.
Looking at valuations of other pharma stocks like Sun Pharma (Re 1 face value), Shasun (Eps Rs 7, cmp Rs 394, again Re 1 face value), Dr Reddy ( PE Ratio of 43) and even Cadilla/Lupin getting PERatio of 32-40, CIPLA appears underpriced.
We feel that CIPLA (unless there is huge institutional selling pressure) should cross 800 mark by August expiry. Stock appears good for long term perspective also
3. NOBLE EXPLOCHEM LTD Many investors have expressed their doubts about various triggers mentioned by us ( VRS, preferential offer to be made to a Bse listed entity, coming hike in Promoter stake etc), We reiterate that we have not made any false statements and no exaggeration. We have made mention of certain triggers which are based upon DOCUMENTARY EVIDENCE. Investors will not find these info anywhere ( annual report or Management Discussion or in the results). Hence, these doubts should not prevent investors from buying Noble. Stock has come down due to large scale profit booking (Q1 results have nothing new but we had anticipated these type of results only bcoz co is yet to resume production). It provides a very good opportunity to accumulate Noble.
Dear Sirs
ReplyDeleteThanks for post. However despite good numbers both Rain and Cipla are down
Also for CIPLA there is concern for future of nexium there premium product as told by management. They increase future growth guideline
Why Rain is down I do not know. Please advice
Reg your query on CIPLA, from the huge huge volume in 1st 15 minutes
Deleteupon opening of the market on Monday, it appears that some very strong
bear cartel had predecided to hammer down the stock. Otherwise, with
huge vastly improved results and management guidelines (in concall)
that co gave guidelines of 20% growth in topline and 100-150 basis
point growth in margins, stock should not have plummetted so much.
Fear of Nexium have down overplayed by bear cartel. We suggest you to
see the interview given by co's MD Mr Saxena on CNBC yesterday evening
which indicates promising prospects for the co. If you have patience,
you may buy more. We are confident that stock should bounce back
sharply
Reg your concern about fall in Rain share price. Pl note that despite good performance, share price of any co can fall temporarily due to various reasons e.g. bad market sentiment (market was sharply down), some large and sustained selling by some DII/FII (and we aware that one DII is a seller since last 1 week). When stock comes down with
ReplyDeletelarge volume and decent delivery ratio, it means there are buyers also who know real value of the co. Like height of child does not increase
everyday, share price of a co does not rise everyday. Rain is an investment idea which WILL give BIG appreciation in 2016. Rain is not for traders
Thanks Sir for your detailed response, I am satisfied with it
ReplyDeleteSir, if you were to chose between Marksans pharma or Rain to invest 2lakh for long term...2 years or more then what would you suggest. Thanks
ReplyDeleteMr Vikas,
DeleteUndoubtedly, I will invest in Rain Industries Ltd. Despite blow-out results, Rain has not gone up (due to institutional selling). However, stock not rising in short term should not deter you. Rain at present is our top pick in midcap segment
Hi sir,
ReplyDeleteI was dong some research on why the stick is falling continuously from last week. I observed that the company has actually reported a standalone loss of more than 2.5 crores. I am sure you had considered this factor in your analysis. But before putting my money I want to verify once. I has shortlisted another stock to invest but I have kept that on hold after you suggested for RAIN.
Standalone results of Rain have no meaning from investment point of view. Rain's entire business whether cement, or CPC or CTP are under its subsidiaries. Hence, one has to consider ONLY consolidated nos
Delete