Latest orchid chemicals reports
[2008-4-1]
Orchid Chemicals' expertise in the cephalosporin space, strong cash flows and cheap valuations make it a must-have scrip in your portfolio.
When it comes to labels we are all Buffet clones. We pick credible managements, we swear by promising businesses, we genuflect to cash flows. When it comes to living this label, we skip all the pages headlined arkets during a bear trough and move to the back page.
Which is why when we encounter an unusual 40 per cent decline in a stock generally acknowledged as safe, we hiss h, not this one and tell our research analysts lease find me another.
And such is our destiny with Orchid Pharma. After last week decline when an erstwhile strong buyer struggled to find loose change, the Rs 1,500 crore asset company encountered a market cap reality of around Rs 800 crore.
The big question: does Orchid represent excellent value at this level?
Consider first the industry storyline: reasonable growth, modest valuations and a relative insulation from the global slowdown.
There is also a case that with pharmaceutical companies reaching out to diverse global markets, restructuring their way out of low growth and gradually reducing their capexes, the worst has probably been seen in the sector.
Besides, any global slowdown is only expected to highlight the cost-effective proposition of Indian pharmaceutical companies, so there is an encouraging argument building up.
Now come to Orchid proper. The company is an attractive volume-value proxy for a number of reasons.
When it comes to labels we are all Buffet clones. We pick credible managements, we swear by promising businesses, we genuflect to cash flows. When it comes to living this label, we skip all the pages headlined arkets during a bear trough and move to the back page.
Which is why when we encounter an unusual 40 per cent decline in a stock generally acknowledged as safe, we hiss h, not this one and tell our research analysts lease find me another.
And such is our destiny with Orchid Pharma. After last week decline when an erstwhile strong buyer struggled to find loose change, the Rs 1,500 crore asset company encountered a market cap reality of around Rs 800 crore.
The big question: does Orchid represent excellent value at this level?
Consider first the industry storyline: reasonable growth, modest valuations and a relative insulation from the global slowdown.
There is also a case that with pharmaceutical companies reaching out to diverse global markets, restructuring their way out of low growth and gradually reducing their capexes, the worst has probably been seen in the sector.
Besides, any global slowdown is only expected to highlight the cost-effective proposition of Indian pharmaceutical companies, so there is an encouraging argument building up.
Now come to Orchid proper. The company is an attractive volume-value proxy for a number of reasons.
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