We have been reading the latest Annual Reports of the companies we are tracking.

This is our second post where we’re sharing our notes on  Annual Reports of the stocks from our watchlist. Please don’t treat this as a buy recommendation. We find these businesses interesting and we may build position (or buy more of those that are already in our portfolio) in them in the future. The purpose of this post is to bring clarity in our understanding of the businesses we are tracking. Putting it up here makes it easier for us to refer them at a future date.


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Please click on the read more button for more details on each stock.

Apcotex Industries

Apcotex is one of the leading Synthetic Lattices and Synthetic Rubber makers in India. Even during the slowdown in auto and construction industry, Apcotex has managed to improve its operating margins with the help of better product mix and raw material price correction. Due to a slowdown in the auto sector, near term revenues may face pressures, however, the long term growth prospect remains intact. Valuations at the current level at 20 times earnings are not cheap, however, given the growth prospects, it doesn’t look very expensive as well.

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Intellect Design Arena

Intellect Design Arena is an emerging player in the financial technology space. They have successfully built a robust suite of products helping them cater to any and every financial institution no matter the function or sector. The company’s products have found acceptance across a wide variety of geographies from the advanced markets of US, UK, Japan to growth markets in India and Latin America. This highlights the versatility of their product customizations and their expertise in handling the various compliance requirements and regulations in diverse geographies. The company has now entered the product payoff phase and is expected to generate long term value in the years to come.

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Jyothy Labs Ltd

Jyothy Labs is a consistent performer in the FMCG segment in India. They have successfully carved out a niche for themselves and have established themselves as market leaders in the fabric care and dishwashing segment. The company has significant room to grow in these segments due to the presence of their power brands and the expansion into newer states for their lesser brands. The company is gearing for new product launches for Margo and Exo which will be significant for the company in the near future. It remains to be seen how the new brands perform. Further, we also need to watch out whether the declining household insecticides industry will continue to bring down revenues for the company in this segment. Nonetheless, Jyothy Labs remains an interesting FMCG company which is reasonably valued and have the potential to grow sustainably.

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NATCO Pharma

NATCO Pharma is one of the long standing pharma companies in India with a good track record over the years. It has been a long term wealth creator for its shareholders. Unlike most pharma companies which are dependent mainly on US market, NATCO has diversified into other geographies like Canada, Brazil, China and many other to de-risk their dependency on the US markets. Robust pipeline of products, strong research capability, high free cash flows and reasonable valuations make this large pharma company worth looking as an investment option.

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