Pharma learnings 101:

Higher the difficulty to manufacture, Lower the competition, Higher the pricing power.

Higher the regulatory oversight, the Bigger is the moat for those who comply.

#PharmawithJST

Commodity Supercycles.

Hit the 're-tweet' & help us educate more investors.

A micro thread 🧵👇

1/ What is a commodity supercycle?

They are near decade long periods where commodities trade well above their price trend

supercycles are rare

Going back 100 years, Only 3-4 supercycles have been identified & each was tied to a transformational period of economic development.

2/ A one-two year rally in commodity prices is NOT a supercycle, rather could just a rebound from an imp. event as what even happened after the 2008 great recession.

3/ Two commodity supercycles have occurred since the end of World War II.

The 1st started in the mid of 1960s & lasted through the 1970s.

Likely driven by a collapsing US dollar, higher inflation & 2 oil price shocks.

4/ Why US dollar is an important monitorable?

Raw materials are almost always priced in US dollars.

When the value of the dollar drops, it costs more dollars to buy commodities. At the same time, it costs a lesser amount of other currencies when the dollar is moving lower.

On Cyclicals

All hell breaks loose once the growth slows down; as every investor rushes to exit at the same time. The decline is 5x faster than the rise.

Glenmark Life Sciences (GLS) IPO notes 🔬

Plans to take the capacity to 1762KL (currently 762KL) in the next 4 years.

Hit the 'retweet' & help us educate more investors

A thread 🧵👇

#IPOwithJST

1/ About the company

Developer & manufacturer of high value, non- commoditized APIs (complex & low competition) in chronic therapeutic areas: CVS, CNS, pain management & diabetes, etc

Basic details about the IPO 👇

Note: After paying off liabilities, 150crs remain for capex.

2/ The Journey

Established the API business in FY02

Since 2015, Have not received any adverse reactions from regulators (USFDA, PMDA) in the total 38 audits & inspections & Have gone through 432 customer audits.

Filled 403 DMFs & CEP registration across markets globally.

3/ Trends that the company is betting on & what works for them

China+1: India API market growth (10% cagr projected from FY21-26) will outpace the industry: Driven by specialty API+ Strong domestic market

Highest no. of USFDA approved API facilities & % of DMFs filled

4/ Interesting facts

- 120 molecules: $142B market size
- Targetting 8 to 10 new molecules every yr (Key differentiator over time)
- 66% of sales from regulated markets
- Works with 16 of the top 20 generic cos.
- Top 7 customers: 5 to 15yrs old

Where is Hikal heading in the next 5 years?

Explained judiciously by Mr. Sameer Hiremath in the Q4FY20 Concall.

Note: It will not be a smooth journey.

Windlas Biotech IPO notes 💊

'What's in a name? that which we call a rose by any other name would smell as sweet' ~Shakespeare

Hit the 'retweet' & help us educate more investors

A thread 🧵👇

#IPOwithJST

1/ Basics about the IPO 👇

Incorporated in 2001

Fresh Issue of 165crs (50 for capex | 48 for Working capital | 20 for debt payment) + OFS of 237crs (Partially by promoter & PE Tano selling out as the fund tenure is up)

~ Total raise of 402crs

2/ About the company (Not a Biotech company)

A Contract manufacturer for formulation cos. (204 in total) for Indian markets & a small domestic OTC biz

3279 products, 4 plants with 700cr tablets/capsules capacity

Emphasis on chronic (60% of rev) & complex generics (70% of rev)

3/ History

Revenues:
FY11 - 100cr 👉 FY14 - 200cr 👉 FY21 - 400cr

Growth is similar to the Indian pharmaceutical sector, not gaining any market share even after increasing products.

Customers include Pfizer, Sanofi India, Eris, Cadila, etc.

4/ Competition: No Moat

400+ organized & 15000 unorganized players in the same space: 2% market share

Some of the things that can drive consolidation: Customers preferring better compliance

However, a single customer usually has 35-40 contract manufacturers for products.

5 RULES TO IDENTIFY A STRATEGY THAT WORKS:

There are plenty of trading systems available on the internet and there are many trading systems providers.

But how do you know which ones are going to be potentially profitable?

1/ PREMISE OF THE STRATEGY:

The most important factor in any trading system is the premise or philosophy or logic on which it is built.

The systems must be able to identify certain repetitive behaviors which are inherent to any market.

An example could be #trend or #momentum or #mean reversion etc.

The magnitude of these behaviors could vary over time but they are natural to any markets.

Better yet, you should have multiple systems that attack these behaviors...

This is what I call the Hybrid Approach !!!

2./ SIMPLER, THE BETTER:

Once you have understood the logic behind the system, make sure it's based on simple rules.

If there are more rules, it’s a red flag that the systems are probably over-optimized or curve fit to past data which is unlikely to work in the future.

Most of my strategies have no more than 5-6 rules.

That’s it.

Keep it Simple, Stupid!

Why & how does rising Crude Oil hurt India?

A short thread 🧵

India is the 3rd largest consumer of Oil at 5.35 million barrels per day (MBPD) behind US (21.2mbpd) and China (15.1mbpd)

India imports nearly 85% of its total Crude oil consumption every year.

India's own production has been below 700,000 barrels per day for a long time.

India imports oil in the following share as per FY 21 numbers:

Iran 17%,
Saudi Arabia 16%,
UAE 14%,
USA 9%,
Qatar 8%,
Others 38%

India import share for Oil from Russia is under 2%, an insignificant number.

India imports about 290 Million tones of Oil in a year.

Assuming that Oil prices are at $75 (last year),
India's oil import bill is ~ $165bn

India exports refined petroleum products as well. At $75 oil price those exports would amount to $58bn

=Oil trade deficit of $105bn

Oil at:
$100, India's oil trade deficit (imports - exports) would be ~ $140bn

For every $10 rise in Crude Oil from say $100, India's oil trade deficit will rise by ~$15bn

For instance at $120 Oil price it would be ~ $170bn

Some useful websites for investing-

Step up SIP Calculator-
https://t.co/Wa6oaBgHac

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CAGR Calculator-
https://t.co/NNfy0x33eS

Stock Research sites-
https://t.co/wG26d3OMY8

https://t.co/kJb8xZI3NF

https://t.co/khNeWuZgtJ

😎😎Happy Investing 😎😎