Global Healthcare Analyst

Tina Banerjee

Equity Bottom-Up

<ul>
<li>
<a href="https://www.smartkarma.com/entities/piramal-enterprises-ltd" target="_blank" data-smartkarma-citation="entities:14158:1" rel="noopener">Piramal Enterprises (PIEL IN)</a> obtained shareholders nod for demerging its pharma business and consolidated under Piramal Pharma Limited (PPL). Later, PPL will be listed on India stock exchange.</li>
<li>PPL has a differentiated pharmaceutical business model, with three business verticals. CDMO, the largest revenue contributor, has track record of consistent above-market growth due to its niche and complex capabilities.  </li>
<li>Listed as a separate entity, PPL will see multiple expansion and command premium valuation over other Indian generic drug makers, due to its niche and limited competition portfolio.</li>
</ul>



Piramal Enterprises (PIEL IN) obtained shareholders nod for demerging its pharma business and consolidated under Piramal Pharma Limited (PPL). Later, PPL will be listed on India stock exchange.
PPL has a differentiated pharmaceutical business model, with three business verticals. CDMO, the largest revenue contributor, has track record of consistent above-market growth due to its niche and complex capabilities.  
Listed as a separate entity, PPL will see multiple expansion and command premium valuation over other Indian generic drug makers, due to its niche and limited competition portfolio.


Piramal Enterprises (PIEL IN): Demerger to Create a Differentiated and Niche Pharmaceutical Business

Indian Accounting Research Analyst, Trudence Capital Advisors

Nitin Mangal

Indian Accounting Research Analyst

Trudence Capital Advisors

Trudence Capital Advisors Private Limited is a SEBI-registered Research Analyst, holding SEBI registration number INH000015747. Our firm is dedicated to providing independent and unbiased research on Indian mid to large-cap companies. Trudence Capital is known for its counter-consensus views, with a focus on forensic research and on-ground primary investigations. Our research approach is thorough, involving detailed analysis of accounting practices and governance, alongside extensive channel checks.

Independent & Unbiased Research

Forensic Accounting

<ul>
<li>
<a href="https://www.smartkarma.com/entities/ajanta-pharma-ltd" target="_blank" data-smartkarma-citation="entities:10053:1" rel="noopener">Ajanta Pharma (AJP IN)</a>  together with its subsidiaries, develops, manufactures, and markets finished dosages and markets it both domestic and internationally.</li>
<li>Although the company has been profitable, it does exhibit several concerns on the balance sheet side and few on the governance end.</li>
<li>Major setbacks include elongated cash conversion cycle, declining returns and efficiency ratios, doubts on effectiveness of R&amp;D, and capital allocation woes.</li>
</ul>



Ajanta Pharma (AJP IN)  together with its subsidiaries, develops, manufactures, and markets finished dosages and markets it both domestic and internationally.
Although the company has been profitable, it does exhibit several concerns on the balance sheet side and few on the governance end.
Major setbacks include elongated cash conversion cycle, declining returns and efficiency ratios, doubts on effectiveness of R&amp;D, and capital allocation woes.


<ul>
<li>
<a href="https://www.smartkarma.com/entities/aurobindo-pharma-ltd" target="_blank" data-smartkarma-citation="entities:19974:1" rel="noopener">Aurobindo Pharma (ARBP IN)</a> shares have corrected more than 40% from peak and are trading at discount to peers. The company’s U.S. business is under pressure, resulting in deteriorating profitability.</li>
<li>We are not seeing any immediate respite in the U.S. formulation business. Hence, investors can avoid Aurobindo Pharma shares.  </li>
<li>However, value unlocking through stake sale in injectable business can be a near-term catalyst, resulting in relief rally in the stock.</li>
</ul>



Aurobindo Pharma (ARBP IN) shares have corrected more than 40% from peak and are trading at discount to peers. The company’s U.S. business is under pressure, resulting in deteriorating profitability.
We are not seeing any immediate respite in the U.S. formulation business. Hence, investors can avoid Aurobindo Pharma shares.  
However, value unlocking through stake sale in injectable business can be a near-term catalyst, resulting in relief rally in the stock.


Aurobindo Pharma (ARBP IN): Pain Continues in the U.S. Formulation Business

Pan-Asia Index Rebalances/ Events/ Delta One, Periscope Analytics

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Event-Driven

On April 22, the National Stock Exchange of India (NSE) published a list of 34 stocks that would be excluded from the Futures and Options segment for not meeting the enhanced eligibility criteria to remain in the derivatives segment with effect from June 28. What followed was a complete and utter meltdown across the stocks involved. While the Nifty was up 2.13% during the period, the average return across the 34 stocks was -14% with the median return at -13%.This has a profound impact for investors in Indian equities, especially those focused on small and midcap names. With 161 names still included in the derivatives market, investors need to be aware of the impact of changes in the derivatives market on their stock portfolio.

On April 22, the National Stock Exchange of India (NSE) published a list of 34 stocks that would be excluded from the Futures and Options segment for not meeting the enhanced eligibility criteria to remain in the derivatives segment with effect from June 28. What followed was a complete and utter meltdown across the stocks involved. While the Nifty was up 2.13% during the period, the average return across the 34 stocks was -14% with the median return at -13%.This has a profound impact for investors in Indian equities, especially those focused on small and midcap names. With 161 names still included in the derivatives market, investors need to be aware of the impact of changes in the derivatives market on their stock portfolio.

India Equity Derivatives - The Tail Wags the Dog

Asia focused research insights & advisory, Asia Advisors

Vinay Patel

Asia focused research insights & advisory

Asia Advisors

Asia Advisors is an independent financial advisory and research firm working closely with corporates and institutions to provide consulting solutions & research insights. We provide advisory services including capital solutions, business strategy and investment insights.
Firm is headed by Vinay Patel who has close to two decades of experience in research and business development at large, international investment banks such as HSBC and ICICI Securities. Led research efforts in areas of Macroeconomics, Asset Allocation & Investment Strategy for close to a decade in global & domestic research teams. As a business head in Singapore, advised top global investment management firms & Portfolio managers in Asia for India related investments.
Vinay was recently joined by Swapnil Manish, an investment banker and ex-ecommerce entrepreneur with more than 12 years of experience. Swapnil was the TMT banker at BNP Paribas and was part of several large M&A and ECM transactions (Bharti-Zain, Bharti Infratel IPO, Schneider-Zicom among several others). He's also had a stint as an ecommerce entrepreneur having launched & led Mumbai's first online grocery player.

Thematic (Sector/Industry)

Primary issuances are expected to remain strong in 2017 following a five-year high in funds raised in 2016 (Rs 220bn) even as Fed rate expectations weigh on the broader secondary market outlook for India. Data shows that primary issuances in previous years have bucked the trend of weak capital inflows and in our view companies evaluate sector appetite &amp; valuations levels before deciding on a public issue. For e.g. in the recent past, CY2015 hardly recorded any significant FII inflows however the…

Primary issuances are expected to remain strong in 2017 following a five-year high in funds raised in 2016 (Rs 220bn) even as Fed rate expectations weigh on the broader secondary market outlook for India. Data shows that primary issuances in previous years have bucked the trend of weak capital inflows and in our view companies evaluate sector appetite &amp; valuations levels before deciding on a public issue. For e.g. in the recent past, CY2015 hardly recorded any significant FII inflows however the…

IPO Pipeline to Remain Strong as PE Funds, Quasi-Govt Promoters Aim for Portfolio Exits

India

Ajanta Pharma Limited is a pharmaceutical company involved in the areas of product research, manufacturing, and marketing. The Company's manufacturing capabilities include segments such as antiretrovirals, antimalarials, cardiovascular, dermatology, and ophthalmology. The Company also markets over the counter products that include some nature-based remedies.

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Ajanta Pharma (AJP IN)

Piramal Enterprises (PIEL IN): Demerger to Create a Differentiated and Niche Pharmaceutical Business

Shareholders’ nod for the proposed demerger will create pharmaceutical-focused listed entity, which should pave the way for value unlocking due to...

Tina Banerjee

Ajanta Pharma: Forensic Analysis

Ajanta Pharms's major setbacks include elongated cash conversion cycle, declining returns and efficiency ratios, doubts on effectiveness of R&D,...

Nitin Mangal

Aurobindo Pharma (ARBP IN): Pain Continues in the U.S. Formulation Business

Aurobindo’s U.S. formulation business is witnessing price erosion, which is impacting the revenue and margin. However, value unlocking in...

Tina Banerjee

India Equity Derivatives - The Tail Wags the Dog

On April 22, the National Stock Exchange of India (NSE) published a list of 34 stocks that would be excluded from the Futures and Options segment...

Brian Freitas

IPO Pipeline to Remain Strong as PE Funds, Quasi-Govt Promoters Aim for Portfolio Exits

Primary issuances are expected to remain strong in 2017 following a five-year high in funds raised in 2016 (Rs 220bn) even as Fed rate expectations...

Asia Advisors

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