Celestial Biolabs Ltd (CBL) is an ISO 9001-2001 certified company with a decade of experience in Insilico (performed on computer or via computer simulation) Drug Discovery and Development, and contract research services. The company has numerous patents under its belt.
Investment Rationale:-
Ø The Indian Biotech industry in 2008–09 clocked US$ 2.67 billion registering a 18 percent growth (in value) over the previous fiscal, while it is expected to touch US$ 5 billion by 2010 and US$ 25 billion by 2015. This kind of growth is phenomenal and unmatched by any other industry.
Ø The Promoters of the company have increased their holding by almost 5% in the last 2 years. A 5% increase is clearly indicative of the confidence the Management has in the prospects of the company.
Ø The company has no debt on its books, and are clearly not facing any working capital constraints. The Gross block of the company increased by more than 20 crore between Mar'08 and Mar'09, while there is another Rs 23 crore Capital work in Progress. The company has been expanding its facility at Hyderabad in order carry out R&D related to Drug molecule development and also start the production of Industrial Enzymes.
Ø Celestial Price to Book value ratio is less than 1, while it is mostly in the range of a multiple of 5-6 for leading Biotechnology firms. Also it is trading at a PE multiple of just 4, while the industry standard is 25. With revenue growth and Re-rating, one can expect very high capital appreciation in next 3-4 years.
Ø As indicated previously Bio Pharma, Bio Services, Bio Informatics and Bio Industrial are the most potential high growth areas, and the company is involved in exactly all the same activities.
2 Phase Buying Strategies Suggested [Always buy in SIP ways]
ü 1st Phase : Buy at the current price range Rs 28– 30 [60% of investment]
ü 2nd Phase : Add if the price falls down to Rs 22 - 24 [40% of investment]
>>Expect at least 12-15 times return in next 3-4 years from now!!!
Happy Investing!!!
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ReplyDeleteMost people get interested in stocks when everyone else is. The time to get interested is when no one else is. You can't buy what is popular and do well.
ReplyDeleteBook full profit in Celestial Biolabs @42 now :)
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