IS DR LAL Path labs Worth Investing?

If listed DR LAL PATH LABS will be the only pure play listed Diagnostics business in india. The price band is RS 540-550.
                                 The good thing is that they are giving RS 15  Discount to retail investors.One more positive thing is that the promoters are not selling anything from their holding.It is the Private equity investors who bought earlier are now selling to cash out.

The company had grown from 342 crores revenue in 2012 to 660 crores in 2015 that is a CAGR of 29% on sales.It is a healthy growth and given indias population of 120 Crores.The companies  profit also grew  from 45 crores to 95 crores.

• One more good thing is that the company is not having any debt.And it is infact having cash worth some 235 crores at the end of FY 2015.
• As per the records given Company generates cash of 80-90 crores per year and capex which it spends is 30-40 crores.So net net there will be some cash flowing into the balance sheet every year.

The company is priced at 46-47 times Price to Earnings and it seems a bit stretched.But there is no player available in that space to check the valuations in the listed space.

The companies financials are mentioned below for reference.

So overall the company is a bit expensive but i guess there is at least 10-15 % upside left because of the brand and also because of no leverage and free cash flow.

References:

http://economictimes.indiatimes.com/markets/ipos/fpos/is-pathlabs-ipo-worth-a-look-heres-what-the-brokerages-say/articleshow/50071485.cms

http://economictimes.indiatimes.com/markets/stocks/news/5-good-reasons-to-go-for-dr-lal-pathlabs-ipo/articleshow/50023024.cms

IS Alkem Laboratories Worth Investing?

                                                            Alkem Laboratories is the fifth largest pharma company in the country and it generates 75 of the revenue from the domestic sales.But in general all the pharma companies generate most of the income by exporting to other countries.This company generates 25% of sales from international market.

                                        

                                                                   In the price band of RS 1020 to 1050 the issue is priced at 25-26 times price to earnings compared for FY 2015 which is at a discount to the listed peers like CADILA,LUPIN and TORRENT which are trading at premium valuation.See the charts below for the Lupins PE as an example.

When compared to Lupin the IPO is trading at a discount so there is a scope for upside.

The financial results of Alkem  laboratories is mentioned below for your reference.

So overall the companies is growing very well and there is some thing on the table for the retail investors to get if they subscribe for the ipo.

The below Links or reviews on the IPO might be helpful to know more details about the company.

http://www.simpleinterest.in/alkem-laboratories-ipo-review-recommendation/

http://www.chittorgarh.com/ipo_review/alkem_laboratories_ipo/2268/

https://www.sptulsian.com/article/86560/alkem-laboratories

                     How to Delete Theme in MIUI 5

Below is a simple post which will help in deleting a Theme Downloaded in MI4I

Step 1: Navigate to the themes section in your mobile.

Step 2- Click on Offline (if you want to change theme in between which you have downloaded).

Step 3- Now you can see all the Downloaded themes.

Step 4- Click on the Theme you wish to Delete on the Phone.

Step 5- Click on Delete button the theme will be deleted.

How to pick the Right stock in Stock market Jungle

                                     How to pick the Right stock in stock market Jungle

                                          Before starting the post just wanted to remind you a Two rules  by Warren Buffett on stock market investment.
                                   
                      “Rule No. 1: Never lose money. Rule No. 2: Never forget rule No.1”

Always remember the above quote while investing in a particular stock or maybe thinking of investing.Always don't invest in any stock as some analyst has given advice or some famous personality has invested in the stock.

                                    Check the below parameters carefully before investing in a company.

• Try and understand what does the company Do.(Go to the company site and see what does it do and what are the products and think may be after 15-20 years will the products be relevant ).
• Main thing is to try and invest in a Debt Free Company.(Where there is no Debt and they generate cash each and every quarter).Example for this is Infosys which is sitting on a Cash of 30000 Crores(This is huge amount of money).
• Check if the company is  the market leader (If so then it makes sense to invest if it is less expensive).how to find out the Company is expensive or not.This might be the question you might have come across.There is P/E( price to Earning) if the price to earning is more then the stock is expensive.But Market leaders like Asian paints are expensive see the below Details to figure it out yourselves.

The P/E ratio at which Asian Paints are trading is 58 which is very high.But generally market leaders have pricing power through which they can maintain margins.They can just increase and pass on the Price hikes and still be making huge profits.We should chose such companies but when the P/E is a a bit or else we might end up losing money.

When Speaking about P/E I would like to quote about Warren Buffets Quote on it

The Market Can Price Things Wrong

“Price is what you pay. Value is what you get.”

There is a lot of inherent meaning in the above Quote... Market can price the stock ruthlessly high but it doesn't mean that you go there and buy it.Wait and watch approach works out sometimes.

You should check for the financials of the company carefully and see how is it performing before investing.See the snap shot of the financials of infosys for example.See the total Debt of the company is 0. Net profit is also constant and it keeps on adding cash to the kitty of the company so the company can pay dividend to the investors.

                    The last and the most important advice to first time investors is If you want to invest 100 rupees in a particular stock then don't invest it at once.Invest in a staggered manner.

Mutual fund Investment Vs Direct stock market investment

In the present volatile market, First time investors should be very cautious where to invest and how they chose the investment.In the lure to make quick buck in the stock market by  investing in penny stocks by hearing few analysts you might end up losing your hard earned money.So for beginners or people who are just started investing Mutual funds are the better option and in the long run they multiply your money.

                                Stock market returns are generally positive over the long run.Below is the sample graph of Nifty index for the past 15 years.You see the graph which shows the Nifty in upward trajectory.But in the short run the market is volatile.So you need to invest in a staggered manner if you want to invest directly in stock market.

Nifty Past 15 years growth graph

Mutual funds are also very good investments if you are not able to invest directly in stock market.

For investing in stock market you need to know the stock market basics,When to buy and when to sell and also why you want to buy the stock.So before buying you need to ask lot of question to your like why do you want to buy this stock,It should not be a random decision like some one suggested you or some one else bought it.

                                                    

                                                    Mutual fund investments should be started at your young age itslef.The power of compounding is so good that when you start early you will reap the benefits of it see the below example to understand it better.

Though the difference in both the investments is just 5000 rupees.It made a lot of difference to the overall Final amount.

One very important thing for any investor is Never Borrow and invest.If you had to pick one mutual fund that will grow over next 10 years you can pick  an Index fund.

Example:Reliance index fund Nifty plan(Growth option).See the NAV of the Fund for the past 4 years.

If the Nifty increases this fund nav increases.So if you invest in this particular fund without investing in individual nifty companies you can enjoy the superior returns.One thing is that india is a 2 Trillion dollar economy now and it will easily become 4 trillion dollar economy in the next 10 years.So the consumption of the People will also increase, Automatically the Earnings of the companies increases and so the Nifty also increases in the long run.

                                                 One very important thing to remember before investing is never invest by taking an advice from anyone even me.I started investing in mutual funds 5 years back and now i have got good returns from them but you should have patience.And you should not stop investing when the stock market is up or down.Never look into the Nifty just keep on investing and you will earn profit in the long run.Never invest for short term whether it is stock market or in Mutual funds these are tools to earn wealth in the long run.

Happy investing :) My next blog will be on how to find out the right stock .. coming soon.