20120322
There is more hope than a reliable story backing this particular pick. Nonetheless value investing for sure. It is a pharma company with licenses in Anti-malarial, erectile dysfunction and dermatology preparations.
Pros
- It’s erectile dysfunction preparation is Kamagra. The active ingredient sidenafil citrate patent of Pfizer ends this month (March 27, 2012). Most pharma companies will be able to sell sidenafil as a generic drug, without using the words Viagra, Levitra or Cialis. Patent over the use of word ‘viagra’ will continue through 2019. The ensuing chaos and confusion only means a big loss to Pfizer and gain for every generic preparation. Kamagra is famous. Googling yields you several pages as here.
- The insiders are buying only for the second time in five years as you can see in Feb.
- Sales 3y CAGR is roughly 40% and PAT 3y CAGR is 24%. Debt to Equity ratio is about 88% and debt has come down between FY10 and FY11. PE (CMP/TTM EPS) = 8.6
Cons
- It is not clear how much of Ajanta’s sales come from Kamagra at least for a retail investors like me.
Trivia
- Company keeps shying of Kamagra. Random examples: smaller brand Asmi appears 7 times in Gitanjali’s FY11 annual report, Reid & Tailor appears 11 times in SKumar’s FY11 AR, while the word Kamagra appears precisely ONCE in FY10 as well as FY11 ARs
Disclosure
I have today increased my portfolio’s exposure to this stock from 3% to roughly 11%.
investingkitten 