Orchid Chemicals is a stock I recommended at higher price few years back . Later its financials worsened and stock price crashed to lower level due to its mounting debt.Company was trying to reduce debt through a CDR package but it delayed for a long time .Even without implementing CDR , company turned to EBITDA positive in latest quarter.Now CDR package approved by the lenders ( Read the details HERE). With this approval company can now complete the deal with Hospira ( Sale of Orchid's active pharmaceutical ingredient (API) manufacturing facility in Aurangabad, Maharashtra, and an associated research and development (R&D) facility in Chennai which is pending since August 2012 ) , and concentrate in other existing business (antibiotics API and oral formulations),and niche therapeutic products. On sale of this unit company is expected to transfer 30 % of its business ,but profitability will improve due to reduction in debt and availability of much needed working capital. Considering company's strong R&D pipeline ,I believe company can regain the reduced business in another few years .Recently U. S. health regulator Food & Drug Administration (FDA) inspected its Irungattukottai, Chennai-based oral formulations facility and approved it without any observations. Those with some risk appetite can BUY and HOLD this stock for long term.Stock is currently trading @ Rs.49
Link to Company website : HERE
Link to latest Annual Report HERE
Disc : I have vested interest in Orchid Chemicals.
with such huge losses and EPS close to -75.......Is it worth risk taking?
ReplyDeleteIt depends on one's conviction and guts to take risk.Major reason for for loss in previous year is huge interest outflow and lack of working capital.For me ,it is worth taking risk.If you feel risk reward ratio is not favorable never take risk not only in Orchid but in any stock.
DeleteHeard this news in some message boards before the official announcement and when the news of hospira taking rupee cover came out in the news before 5 days i convinced myself to buy and bought around 50. think none would get this at this price again....
ReplyDeleteHope with value pick recommendation added to this will see upper circuit till 60....
Durairaj B
Hospira's hedging news was published last week in Business Standard.Since the final approval date postponed many times in the past even after this news most of the market players were skeptical.
DeleteAny stock below rs. 10 having gud future suggest me I will take risk for such stock. Holding period more than 1 year. Send me list for such rs 20 or below rate. Thank u sir my I.d. sagardghetia@gmail.com
ReplyDeleteI am not running any paid service to send privileged messages to anyone's mail id .Reading your comment it seems you are taking risk for me and if so ,no need for that.
DeleteQuestion was too good, and equally the answer :-))))
DeleteHahaha.....what an answer sirji!!
DeleteHello Sir,
ReplyDeleteI have asked this question earlier as well what's your view on Zicom falling EPS and is Ram Ratna a value buy now? They are expanding in Gujarat and there Ram Shramik and Ram Parkon are having good orders?
Not sure about what fall you are talking .Check the result in the below link
Deletehttp://www.moneycontrol.com/financials/zicomsecurity/results/consolidated-quarterly-results/ZSS
Dear sir,
ReplyDeleteWhats ur view on tv18 broadcast with recent result and elections around the corner?
Regards
Skeptical about its promoters
DeleteVP sir,
ReplyDeleteDo you think its time to get into Infra comp to get benefit of good price and appreciation though it does mean some risk?
Your take on IRB Infra for long term?
thnanks
Medium term out look of this sector depends on election outcome.
DeleteValue sir,
ReplyDeleteIf the R&D facility is being sold out to Hospira then how they will have strong &D pipeline?
Do they have more R&D facility?
Yes.
Deletepls guide me i hav bought rswm @ 140 hold or sell . i am new to market.
ReplyDeletepls help me
Not tracking RSWM
DeleteWhat is the status of their FCCBs issued earlier? If they have all been extinguished or can we expect further equity dilutions?
ReplyDeleteCompany redeemed entire outstanding FCCB in February 2012.
DeleteVP...
ReplyDeleteCan you please suggest some stop loss and a target for 2 3 years view...
I feel this stock risky but worth buying as well...
My stock pics are based on fundamentals and not on technical ,hence no stop loss .I am not sure what will you do if a stocks fundamentals are improving and share price came down for a while due to overall knee jerk reaction to some events which do not directly affect that specific stock ?
DeleteDear VP,
ReplyDeleteHow do u see Kewal Kiran Clothing as an investment?
Also, TTK Prestige promoter TT Jaganthan is buying heavily in the open market. Do u think TTK prestige can deliver good returns?
Your comments will be appreciated.
Regards,
Pratul
It is a known fact that Nalanda India Fund is playing in all stocks they are holding - So no comments about KKCL
DeleteNot tracking TTK prestige.
Happy Holi to you, your family and all blogreaders
ReplyDeleteThanks and same to you
Deletethis company promoter is not believable for long term.. he is responsible for the company's bad position because he is worried about takeovers. it might appreciate for short term. eventhough he has talent he dont allow the company to see stable growth.
DeleteEveryone has their own opinion and it may be contradictory .Only because of these opposite opinions trading is taking place in any stock, otherwise there will be only sellers or only buyers. I just expressed my opinion.But it is always better to stick with own opinion and conviction than acting on other's opinion
Deletehope orchid chemicals will rock in coming months
ReplyDeletethanks for giving a valuable pick at this juncture
Dear sir,
ReplyDeleteWith good management and nich products, Why did the company incure loss in the past?? What factors derailed company's profit??
Thanks in advance..
Regards,
chetan
Major issue was increase in principal amount and interest on FCCB due to adverse forex fluctuation ( Later FCCB fully redeemed) .At that critical time its major plant shut down due to a pollution issue for months and fire accident in its R&D wing ..
DeleteHappy holi to all..i am buying it for next holi...
ReplyDeleteDear Sir
ReplyDeleteWhat is your opinion about SEBI since you have been in the market for more than two decades? They talk about transparency and it seems common indian retail investors are still in the dark. I thought of seeking your opinion since time and again common people lose their hard earned money due to the nonfunctioning or failure of these guys. Recent example is the delisting of Reliance Media. They came up with the right issue few months back, took public money and now delisting offer. Above all the price of the share came from 1800 to 45. I know you don't follow ADAG shares. But in general i just wrote Sir. Thank you for your genuine efforts to educate and help us in this market where we see maximum frauds. God bless you. Sulekha
SEBI is for SEBI
DeleteJust a quick question...has the circuit of Nath Bio gene revised? I heard someone say that it has been...should we accumulate the stock at the current price...
ReplyDeleteNot aware of any circuit limit change.
DeleteI believe still there is steam left .Those with some risk appetite and willing to hold till the declaration of June quarter result may still consider this stock post consolidation,probably around Rs.75 level
Deletesir, From your reply I think you ignore about the long term prospect of this stock. I feel your comment indicates only for the short term. Is any change for long term? Pl give us a reply.Regards,K Hari
VP Sir,
ReplyDeleteYour view on Balaji Amines....
do you expect the company to deliver better results
thnx
Need not write off this company due to a tad below expected result in a single quarter.
DeleteDear Sir,
ReplyDeleteI was checking up on the corporate updates on Acrysil on BSE Website and noticed that, "the Board of Directors of the Company at its meeting held on February 25, 2014, broadly considered the offer for acquisition of overseas business and authorized Mr. Chirag A. Parekh, Chairman & Managing Director of the Company, to explore proposition further."
Does this mean that Acrysil is considering selling its overseas operations and business? Or does this mean that the company is looking at acquiring some other company overseas? There was no clarity or further explanation on this matter and I was hoping you could shed some light on this matter...
Hello VP sir,
ReplyDeleteThanks for your value picks. Please provide your sugggestion on Eon electric which is trrading aaround 19 for past 20 days and there is no movement in stock price. I have bough lot of shares at 30 rs and was in huge loss. Please advise me,
Also please provide your suggestion on Brigade enterprises
Thanks,
Prabu
Sir what is your view on orchid now ? One year after this post the company seems to have gone no where -- your views ?
ReplyDeleteIn last one year lot of things happened in Orchid, look at its debt level then and now.
Delete