Equity Watch

FDC a sure shot winner in the Pharma sector

We had earlier recommended a BUY on FDC on 24th Dec. 2008,(click here ) when the share price was less than Rs. 30.We had expected the share price to appreciate to Rs. 40 in a year’s time.However just in 5 months the price has exceeded Rs.40, and now the stock appears to be heading towards a 3 digit mark if the latest results for FY 09( see here ) are any indication.For FY 09 top line and bottom line gowth has exceeded 20% and the share is available at P/E of 7 and PEG of less than 0.4.

Results of coming Q’s are going to be excellent,as the Mgt. has provided Rs. 13 crores as diminution in the value of the investments the Co. was holding as on 31st March 2009 .Since then the value of such investments has multiiplied a few times and the provision that has been provided will be added to profits for Q1 of FY10.For FY10 we expect an EPS of Rs. 10, a quantum jump of 100 % from FY09. 

Buy is again recommended on declines.

This report has been prepared solely for information purposes and the information contained herein may not be deemed to be an investment advice. Such information is impersonal and not tailored to the investment needs of any specific person. The information contained herein is not a complete analysis of every material fact representing any company, industry or security. The views expressed may change. While the information contained herein has been obtained from sources believed to be reliable, no responsibility (or liability) is accepted for the accuracy of its contents. Investors are advised to satisfy themselves before making any investments and should consult with and rely upon their own advisors whether and how to use such information in making any investment decision. Neither the author nor his firm accepts any liability arising out of use of the above informationŠ


2 thoughts on “FDC a sure shot winner in the Pharma sector

  1. neeraj says:

    what about other calls like dcm shriram cnsolidateed, clutch auto, facor steel ?
    iam in heavy loss in this counter suggested by you


  2. Neeraj,
    Events have the capacity of up-setting man’s calculations.They stretch and hold our ego centred emotional patterns to pieces, as if they enjoy playing tricks on us and our limited imaginations.
    Just think and tell me” What and who caused the stock market crash of 2008?Who caused the slump in valuations of companies like DCM Shriram Consolidated?” Company with present market cap of less than Rs. 800 crores ,went down to less than Rs. 350 crore ( share price of Rs. 21 ),whereas only its fertiliser plant will sell for that much.And besides Fertilisers ,its into Power, Sugar, Chemicals, FMCG, infastructure etc.A real conglomerate of many decent businesses. Total valuation of Co’s businesses is not less than Rs. 2500 crores.Please recall that Co. got Rs. 830 crores from just one land deal.
    I hope like me, you are still holding the shares. In a good bull market ( like it was in 2007 ) ,expect a price in three figures.

    Best of luck in future.


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