The third quarter of the financial year 2013 has generally been very weak. The common problem has been the demand slowdown and the pressure on margins due to inflation and competition. In most of the cases results have been below expectations. On the positive side, these challenging times are the best times to re-structure your portfolio. One gets to accumulate high quality ideas at low valuations, (often) due to temporary problems. The important thing is to maintain liquidity and discipline.
Starting off with the good results:
Ajanta Pharma: The company posted stellar results and the stock witnessed a strong activity and appreciation. We discussed about the company here.
The company has posted a 37% growth in the topline from 164 Cr to 225 Cr and 75% growth in the net profits from 18.50 Cr to 32.57 Cr. The results are remarkable as the growth in profits has persisted despite higher taxation. Usually 4th quarter is the best quarter for the company, hence the company may be able to repeat similar performance in Q4FY13 too. We feel investors can continue to hold and try to buy on sharp declines, if any. Continue reading Update on Quarterly Results
We earlier talked about some developing ideas for 2013. This post is to discuss them in more detail.
Caplin Point (BSE: 524742)
This seems to be a very interesting pharma company at an early growth stage. We have been tracking it for some years but it really caught our interest when we received its FY12 annual report few months back. Few snapshots:
The interesting thing was that the company’s topline had grown by almost 35% in 2012, and yet the efficiency improved. The inventory and debtors remained at very low levels, debt reduced and the cash on balance sheet increased. The company has been getting efficient over the last few years: Continue reading Caplin Point & Poddar Pigments
Hello Friends, we wish you and your family a very Happy & Prosperous New Year!
2012 has been a good year for our financial markets with the sensex gaining over 25% this year and beating all other asset classes. The best thing was that the mid caps (the area we focus on) outperformed the broader markets and the high quality stocks were the major wealth creators. Those feeling that they might have missed the bus and it is late, have a look at this stat – markets are still 4% lower than they were 5 years back. It may be just a start of a long term bull market.
We went through the timeline and compiled the list of the best articles, learning and experiences of 2012. (They are not in any particular order):
New Finance Blogs:
In 2012, we had some very interesting new finance blogs; we would love to congratulate them. We expect to see more new investing blogs in 2013.
- Alpha Ideas – Nitin shares the best of the finance articles, videos and reports – everyday
- Safal Niveshak – Vishal simplifies the teachings of the investing geniuses and makes them understandable in Indian market’s context
- Value Investing by Dhwanil – Discusses value investing stock ideas with a clear thought process
- Safir’s Picks – Safir is an opportunist investor, always with many interesting and winning ideas in his pockets (do follow him on Twitter too)
Best Company Visits:
- Astral Poly Technik – We met with the dealers and plumbers in Ahemdabad to do groundwork and were amazed by their feedback for a strong conviction
- GRP – We were amazed by sincerity and knowledge of the management. Looking forward to attend AGM of 2013 too
- Mayur Uniquoters – The grip and vision of the management on the business helped us in increasing the conviction
Our Best performers during the Year (with percentage change):
- Astral Poly Technik (171%) – The growing brand presence and stock discovery led to high returns
- Atul Auto (142%) – Company went pan-India from its home market of Gujrat
- Liberty Phosphate (134%) – Favorable government policies for SSP sector led to mis-pricing opportunity
- Mayur Uniquoters (130%) – Fantastic financial ratios along with growth led to a good re-rating
- Apcotex (101%) – Earlier part of the Asian Paints group, this company did well on growth and dividends
The close runner-ups were up 100% each: Poly Medicure, Indag and BKT
Market learning of 2012:
Earlier we had a lot of focus on undervaluation while looking at a stock ideas. Now we have also started giving more weightage to the business quality and the scale of opportunity available. The three of the worst performing ideas were: Piccadily Agro, Faccor Alloys & BNK Capital
The common thing among all of them was that though they were good on ratios temporarily, but they had a poor business model or management.
Developing ideas for 2013:
During the year, we experimented with lots of ideas and things. We are highly excited about the developments on Screener and the feedback of users. Our favorite features of Screener are:
- Export to Excel – Screener is the first website in the world to provide such a customization functionality
- Alerts for Screens – We love to set the email alerts for the favorite screens in the Screener to keep an easy track of the latest results
Plans for 2013:
We are expecting the credit rate-cuts in early 2013 and are optimistic about the markets ahead. We plan to create more new tools to make investing happier and easier. We hope to discover more new stocks ideas. And above all, we look forward to your comments and support!
Wish you a very happy and prosperous new year ahead.