FINANCE & STOCK ADVICE: My View On Biocon

About The Company

Biocon is well renowned company of the pharmaceuticals sector and hold significant position in its field.For long term investment this counter is always counted to be part of the portfolio.The resulted posted by the company is not satisfactory and forcing to have second thought regarding investment in this stock.

About The Financials

Results for Sep 2008 shows EBITDA margin in pharma segment plummeting to 25.95% from 37.11% of Q1 FY 09. The dent on profitability has been due to rise in raw material costs from 43% of net sales in Q1 of FY 09 to 53.50% in Q2 of FY 09.Total income of Biocon during second quarter ending Sept. 08 was at Rs.442 crores against Rs. 279 crores of the corresponding quarter in the previous year. However, Q2 FY 08 includes the workings of its enzymes business, which was transferred to third party, effective from 01-10-07. Hence, it is appropriate to compare the results of the company on sequential basis.

Net sales rose to Rs.439.30 crores in Q2 from Rs.263.93 crores in Q1 of FY 09. Inspite of this, profit after tax but before exceptional items, has been flat at Rs.49.84 crores against Rs.48.55 crores of Q1. After forex losses provisions of Rs.25.45 crores during Q2, PAT was placed at Rs.25.02 crores against Rs.15.04 crores of Q1.

The company has issued 1 : 1 bonus on 15-09-08, due to which paid up equity of the company increased to Rs.100 crores. This has resulted into an EPS of Re.1.25 for the quarter while it is at Rs.2 for first half of FY 09.

About The Stock

The stock is near top its 52 week low but the pressure on margins may drown it further. The stock is expected to correct more because of the disappointing results.Fresh investors need patient to invest in this stock.

Disclaimer : I do not have any personal holding in this stock.

MULTI BAGGER STOCK GROUP

Some of my group's multi bagger picks during the rally were NMDC , MMTC , STC , Larsen ,Jindal Steel & Power , Unitech , BF Utilities , Jai Corporation , Walchand Nagar Industries, RNRL , Reliance Infra (Reliance Energy) etc.

I had been long associated with a corporate engaged in financial services , where with the assistance of specialized tools along with my special analysis as per some historical accepted theories of stock market like W. D. GANN's Theory , Elliot Wave Theory and others are used with reliable insider information of so called " operators" who play a major role to make a stock ,a Multi Bagger ,I do make my gem picks in this market.

I had been running my group , where the associated people get the reliable and most beneficial to get the unexpected return as seen in the above mentioned tips. Say for example the stock called MMTC had jumped from 2000 level to 56000 per share of historical price where the capital appreciated by 28 times in very short period with 2700% return on capital employed. Likewise in RNRL we started accumulating at RS 25 level from where we saw it moving at 250 level giving 10 times with 900% return.

These sort of return is helpful as ,

1. Handsome gain will make a jack to our capital.

2. Limited stocks trade , as daily trade could be avoided , which is more risky.

3. Long term capital gain , so no tax liability.

4. Whole income in white, which could be further deposited into fixed deposit to get assured monthly income later.

5. Strong income tax file without paying any taxes.

Our role here could be summarized as :

1. Giving tips to all registered member at proper time , when the stock is just about to take off, neither too early not too late.

2. Make sure investor do not gt stuck into it.

3. Recommend to exit when the operator is about to leave it.which is the most important work or else the whole accumulated and deemed profit will be washed away along with part of investment and will remain stuck for long - long period.


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My View On Biocon