In today’s briefing:
- Ajanta Pharma: Forensic Analysis
- Dr. Reddy’s Laboratories (DRRD IN): India Business Is the Only Bright Spot Amid Many Headwinds
- ICICI Prudential Life’s Underwriting Goes to Sleep as ULIPs Frauds Continue
- Camlin Fine Sciences (Update): Capturing the entire value chain
Ajanta Pharma: Forensic Analysis
- 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&D, and capital allocation woes.
Dr. Reddy’s Laboratories (DRRD IN): India Business Is the Only Bright Spot Amid Many Headwinds
- Dr. Reddy’s Laboratories (DRRD IN) is outperforming the domestic pharma industry and aims to expand its market share. Currently, India business contributes 19% of revenue.
- The company’s largest revenue segment, the U.S. generic business continues to see pricing pressure. It plans to launch new products, including complex generics to combat the impact of price erosion.
- Dr. Reddy also has around 13% revenue exposure to Russia and other CIS countries. Sharp depreciation of Russian currency will negatively impact revenue from the region.
ICICI Prudential Life’s Underwriting Goes to Sleep as ULIPs Frauds Continue
- Amongst numerous cases of mis-selling of ICICI Prudential Life ULIP policies we highlight 2 cases of N Yadav and Ramvati Yadav in Raigarh district of Chhattisgarh by ICICI Bank staff
- Fraudulent documentation by ICICI Bank staff which could have been easily exposed has instead been approved by ICICI Prudential Life’s underwriting
- Although highlighted only 2 cases there may be many more hidden cases which should be a major concern for investors in ICICI Prudential Life on the abysmal state of underwriting.
Camlin Fine Sciences (Update): Capturing the entire value chain
- CFS manufactures hydroquinone and catechol from phenol by using oxidation reaction.
- Further, the reaction of hydroquinone with methanol produces mono methyl ether of hydroquinone (MEHQ).
- Depressed prices of catechol, another product formed by the reaction, poses an economical challenge to the company’s MEHQ synthesis process through the hydroquinone route.
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