"Upsurge in the valuation of API companies is also because of formulation companies stocking up APIs. (~ to defensive buying of semiconductors by consumer electronics companies) “If earlier they’d stock for 3m , they began stocking for 6m-12m"
- the-ken.com/story/glenmark…
- the-ken.com/story/glenmark…
https://twitter.com/unseenvalue/status/1424012247655985152
Recent neuland concall showing some reversal of that trend:
Things seem to be consistent.
Things seem to be consistent.
Observe Divi's growth in Jun-20 and subsequent quarters versus growth in this Q:
Observe the Laurus labs API division performance:
Observe YoY growth
Observe YoY growth
My conclusion:
There was definitely some froth in API cos valuation due to extrapolation of growth due to covid-related stocking. As the destocking happens, should see some weak performance and related derating too, as investors adjust their expectations.
There was definitely some froth in API cos valuation due to extrapolation of growth due to covid-related stocking. As the destocking happens, should see some weak performance and related derating too, as investors adjust their expectations.
That's on the short term trend.
But what does Dr Chava say about the long term trend in this space?
But what does Dr Chava say about the long term trend in this space?
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