1. Ajanta Pharma Ltd. (532331)
Ajanta Pharma is an Indian multinational, developing and selling pharmaceuticals worldwide, with its head quarter in Mumbai. The company was established in 1973. Their main presence is in the specialty therapeutic segments of Cardiovascular, dermatology, ophthalmology and musculoskeletal. The majority (65%) of their revenues come from Asia, Africa and Latin America. The company has successfully gone through US FDA inspection, and started operations in the USA in the first quarter of 2013. With a portfolio of 18 ANDAs the US market could be their key growth driver in coming years. The company was one of the earliest entrants in the pharmaceutical sector, as such many of it’s products are market leaders and their brand is recognized very well in India. I am bullish on the whole pharma sector in India, it's estimated CAGR until 2016 is 14-17%, these companies are famous for reverse engineering many drugs and coming up with their cheaper versions. Despite the run up in it's stock price, the current P/E remains at 23, while growth has accelerated to 39%, so it still remains one of the best Indian stocks for the long run. The historical fundamentals are very impressive: for the past five years their CAGR sales, EPS growth and ROE has been 24%, 44% and 25% respectively. Since June, several insiders have bought stock in the company. Fundamentals
Ajanta Pharma is an Indian multinational, developing and selling pharmaceuticals worldwide, with its head quarter in Mumbai. The company was established in 1973. Their main presence is in the specialty therapeutic segments of Cardiovascular, dermatology, ophthalmology and musculoskeletal. The majority (65%) of their revenues come from Asia, Africa and Latin America. The company has successfully gone through US FDA inspection, and started operations in the USA in the first quarter of 2013. With a portfolio of 18 ANDAs the US market could be their key growth driver in coming years. The company was one of the earliest entrants in the pharmaceutical sector, as such many of it’s products are market leaders and their brand is recognized very well in India. I am bullish on the whole pharma sector in India, it's estimated CAGR until 2016 is 14-17%, these companies are famous for reverse engineering many drugs and coming up with their cheaper versions. Despite the run up in it's stock price, the current P/E remains at 23, while growth has accelerated to 39%, so it still remains one of the best Indian stocks for the long run. The historical fundamentals are very impressive: for the past five years their CAGR sales, EPS growth and ROE has been 24%, 44% and 25% respectively. Since June, several insiders have bought stock in the company. Fundamentals
2. Aurobindo Pharma Ltd. ( 524804)
A well integrated pharma company, Aurobindo Pharma exports to over 125 countries across the globe with more than 70% of its revenues derived out of international operations. With multiple facilities approved by leading regulatory agencies such as USFDA, EU GMP, UK MHRA, South Africa-MCC, Health Canada and Brazil ANVISA, Aurobindo makes use of in-house R&D for rapid filing of patents, Drug Master Files (DMFs), Abbreviated New Drug Applications (ANDAs) and formulation dossiers across the world. Aurobindo Pharma is among the largest filers of DMFs and ANDAs from India.
The company aims to achieve USD 2 billion revenues by 2015-16 (currently nearing 1 billion USD). The fundamental story is very similar to Ajanta, valuation is very low, P/S of 1.3 and P/E 18 given 20% growth rates is a good opportunity. Fundamentals
A well integrated pharma company, Aurobindo Pharma exports to over 125 countries across the globe with more than 70% of its revenues derived out of international operations. With multiple facilities approved by leading regulatory agencies such as USFDA, EU GMP, UK MHRA, South Africa-MCC, Health Canada and Brazil ANVISA, Aurobindo makes use of in-house R&D for rapid filing of patents, Drug Master Files (DMFs), Abbreviated New Drug Applications (ANDAs) and formulation dossiers across the world. Aurobindo Pharma is among the largest filers of DMFs and ANDAs from India.
The company aims to achieve USD 2 billion revenues by 2015-16 (currently nearing 1 billion USD). The fundamental story is very similar to Ajanta, valuation is very low, P/S of 1.3 and P/E 18 given 20% growth rates is a good opportunity. Fundamentals
3. eClerx (532927)
eClerx is an Indian KPO (knowledge process outsourcing company) based in Mumbai. The company provides middle/back office operations support to over 30 Fortune 500 companies including 8 of the top 10 investment banks. Through their five delivery centers across India, they support a diverse global client base, including the world’s leading Financial Services, Broadband, Cable & Telco, eCommerce & Retail, High Tech, Industrial Manufacturing & Distribution, Software, Media & Entertainment and Travel companies. The company was founded by Anjan Malik and PD Mundhra, who graduated from the University of Pennsylvania, Wharton School of Business, who rejoined after successful careers in investment banking. They identified significant opportunity in the outsourcing marketplace for a “virtual” outsourced services model for large global organizations going through rapid business and technology transformation but finding continued scalability and quality challenges with their in-house teams. Founders still hold a majority interest in the company. Growing both organically and through acquisitions (acquired UK based Agilyst in 2012 to get into Cable & Telco business), the company is debt-free, with a ROE of 40% and compounded annual growth rate of sales and earnings near 30%. Fundamentals
eClerx is an Indian KPO (knowledge process outsourcing company) based in Mumbai. The company provides middle/back office operations support to over 30 Fortune 500 companies including 8 of the top 10 investment banks. Through their five delivery centers across India, they support a diverse global client base, including the world’s leading Financial Services, Broadband, Cable & Telco, eCommerce & Retail, High Tech, Industrial Manufacturing & Distribution, Software, Media & Entertainment and Travel companies. The company was founded by Anjan Malik and PD Mundhra, who graduated from the University of Pennsylvania, Wharton School of Business, who rejoined after successful careers in investment banking. They identified significant opportunity in the outsourcing marketplace for a “virtual” outsourced services model for large global organizations going through rapid business and technology transformation but finding continued scalability and quality challenges with their in-house teams. Founders still hold a majority interest in the company. Growing both organically and through acquisitions (acquired UK based Agilyst in 2012 to get into Cable & Telco business), the company is debt-free, with a ROE of 40% and compounded annual growth rate of sales and earnings near 30%. Fundamentals
4. Hatsun Agro Products (531531)
Hatsun Agro Products is the largest private sector dairy company in India based in Chennai. It was founded by R.G. Chandramogan in the year 1986. Milk from Select Fine Quality cows is collected from over 300 000 farmers, chosen with care in 8500 villages. The Company’s dairy products include dairy whitener, skimmed milk powder, butter, cooking butter, milk. The Company also produces and markets the very popular Arokya Milk and Arun Icecreams, which won the Best Icecream in the Country contest. The public float of the stock is very small, around 20%, the founder still controls the company (and he does a good job!), there have been also some insider purchases in June 2013. Their stock is selling for a P/S ratio of only 0.85, P/E 27 but spots a growth rate of 35%. Some Indian stocks seem to be selling at very low multiples, if this company was listed in the US, it's market cap would be at least double the current one. The only concern is a higher debt load of 300 Rs. Cr., however the cash from operations (142 Rs. Cr.) is more than sufficient to pay it down in time. Fundamentals
Hatsun Agro Products is the largest private sector dairy company in India based in Chennai. It was founded by R.G. Chandramogan in the year 1986. Milk from Select Fine Quality cows is collected from over 300 000 farmers, chosen with care in 8500 villages. The Company’s dairy products include dairy whitener, skimmed milk powder, butter, cooking butter, milk. The Company also produces and markets the very popular Arokya Milk and Arun Icecreams, which won the Best Icecream in the Country contest. The public float of the stock is very small, around 20%, the founder still controls the company (and he does a good job!), there have been also some insider purchases in June 2013. Their stock is selling for a P/S ratio of only 0.85, P/E 27 but spots a growth rate of 35%. Some Indian stocks seem to be selling at very low multiples, if this company was listed in the US, it's market cap would be at least double the current one. The only concern is a higher debt load of 300 Rs. Cr., however the cash from operations (142 Rs. Cr.) is more than sufficient to pay it down in time. Fundamentals
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