I came across this very interesting stock idea and I think we all should dig into it more and accumulate on declines.
The company was earlier known as Bayer Diagnostics. Siemens group took over this company last year.
- Tiny Equity capital of just 1.57 Cr hence at CMP of 1100 – Mcap of 165-170 Cr is not much considering it to be part of the huge Siemens group.
- The company is into healthcare sector which is bound to grow rapidly over next few years. Cos like Siemens are market leaders in this sector and can exploit the maximum potential.
- The turnover has already started increasing. Co has reported 75% growth till June 09 (first 9 months) and 92% growth in March Qtr (45.38 Cr vs 23.61 Cr)
- The profitability part is not clear due to several adjustments and may be balance sheet clean up after the takeover. But I expect the OPMs to be easily 20%+ if the Siemens group is bringing it’s expertise in this co. We should get a clearer picture in next qtr nos and annual report.
The opportunity I’m seeing is – For a group like Siemens, current size of operations & Mcap are peanuts. They can definitely scale-up big time here and create multibagger returns for shareholders.
Please dig in more and contribute with your industry knowledge on this company.