Amnish Aggarwal on Torrent Pharma plan to acquire JB Chemicals, Jio Finance surge & IT and shipping stocks
Remove Ads
Tired of too many ads?
Remove Ads
, Head-Research,, says Torrent Pharma 's plans to acquire JB Chemicals will be an expensive deal. The acquisition will strengthen Torrent's branded generics in India and overseas. It will also help in CDMO space. The deal is expected to increase margins in the long term. Synergies will likely emerge by the second half of FY27.The acquisition is at around six-and-a-half times EV to sales and it is definitely not cheap, that is one. Secondly, if you look at the portfolio of Torrent and the portfolio of JB Chemicals, whether it is medicines like Rantac, Nicardia or some of the other plays which JB Chemicals offers, in the domestic markets, it is definitely a complimentary deal and it offers them more branded generics in India and overseas and strengthens them in the CDMO space.They need to pay out Rs 12,000 crore and do not have that kind of money in the balance sheet. Plus, it is slightly complicated because they are acquiring some stake and making an open offer and then the merger is there. In the longer term, there is a scope to increase margins. In the longer term, it will play out to the benefit of Torrent Pharma. But yes, in the near term, I do not think there is anything which is very meaningful on the table in terms of any immediate traction to the stock price.In the longer term, definitely, Torrent Pharma will gain from it, may not be in FIY26, because the debt will come on the balance sheet, but as you said, by FY27 second half, by when they want to get rid of the debt, the synergies will also start coming in and might push their margins up by 2% to 3%. So, in the longer term, it will add value to Torrent Pharma.It is very difficult to say because it is a very volatile stock. Earlier from close to Rs 200-220, it went all the way to Rs 340-350. In terms of business, there are not many material things happening. They are gradually building up and might be looking at mutual funds. Then they are looking at lending. But on a very fundamental basis, I would not be able to give any reasons why the stock price has shown an upward movement.In IT services, the commentaries are not likely to be very different from what we have seen in the past couple of quarters. There might be solitary cases here or there where they might give some indication of recovery. But what we are learning as of now is that there is no big change in commentary. In the near to medium term, at least for the next couple of quarters, we will not see any meaningful uptake happening.Obviously, it will depend upon various segments. Some of the companies in BFSI or AI-related, might see some sort of stability, but for ER&D and companies which are catering to auto related stuff in Europe, we will continue to see pressure building up. There is no big change there. Some of the niches will continue to do well, but in terms of commentary, we are not expecting anything drastic as far as IT services are concerned.The acquisition is a positive because for Indian companies which are on the shipping side, whether commercial or defence, first of all, there is a huge runway of growth as we are not building enough ships – be it commercial ships or those for defence purposes.It is also positive for a company like say Mazagon Dock which is into submarines and all sorts of ships. As far as the Sri Lankan acquisition is concerned, it will be primarily for the commercial wing because it would not be possible to extend the defence wing over there.Second, all these shipping companies could be looking at expanding their production, particularly the commercial ship building side because India hardly makes anything and that too above the 10,000 DWT weight. I am not sure as of now if that particular shipyard has the capacity to build larger ships of more than 10,000 DWT or 20,000 DWT but if that happens, it will give Mazagon Dock a lot of fuel to accelerate growth because India wants to develop its ship building industry in a big way.However, it remains quite an expensive stock. It has run up quite sharply after the brief reaction which happened towards the Q3 of last year and from here on, in all these names, one will have to take a very long-term viewpoint of three to five years at least to make any very sizable returns.
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Indian Express
23 minutes ago
- Indian Express
Express RTI: Uttarakhand finance dept questioned Beatles ashram revamp by Bimal Patel firm, state govt gave go-ahead
The Uttarakhand Finance department had flagged the selection of Bimal Patel-led and Ahmedabad-based HCP Design, Planning and Management Pvt Ltd by the state Tourism department for the revamp of Chaurasi Kutiya ashram, popularly known as The Beatles ashram, without a tender, reveal documents obtained under the RTI Act. The documents, reviewed by The Indian Express, show that the Tourism department justified the selection of HCP through single-source procurement by pointing to the complexity of the heritage cum eco-tourism project, and the expertise of the 'world-class' company, which had executed major projects such as the Kashi Vishwanath Corridor and the Central Vista redevelopment near Parliament. While the Finance department did come around to clearing the project, it recommended obtaining a priori the approval of the Forest department, and asked the Tourism department to ensure the rate reasonableness and the fees paid to the company, the documents showed. Following rounds of discussion, the Uttarakhand Cabinet approved hiring HCP as the consultant on August 3, 2023. The Beatles ashram is situated inside the Rajaji National Park in Rishikesh and was visited by the British band in 1968. While the cost of the consultancy is Rs 1.9 crore for the master plan lump sum and a fee of 4.75 per cent of the actual cost of the project for supervision support, Rs 15 lakh was levied for a one-day workshop, site visit, and broad design framework report. This was borne by the Tourism department, while the cost for the actual project will be borne by the Forest department. The complex has nearly 25 buildings, of which 12 will be revamped in the upcoming project. The actual project cost is over Rs 98 crore. The project will primarily involve the retrofitting of structures by strengthening the reinforced concrete beams and slabs. When contacted, Anand Patel, who helms the project at HCP, said that they received a request from the Tourism department in late 2021. 'We declined it then because the architectural intent was unclear. We visited the site twice or thrice, and in 2023 again, they requested and we submitted a proposal,' Patel said. On the conditions set by the Finance department, Patel said he was unaware. 'The conditions by the Forest department were factored in, and our agenda is to make the buildings safe and improve awareness on yoga, art, forest, and wildlife of the area,' he said. The bone of contention between the Finance and Tourism departments was over Rule 59 of Chapter 4 of the Uttarakhand Procurement Rules, 2017. This rule states that services from a single-source consultant can be obtained only after due justification is recorded and approval is obtained from the competent authority. For projects exceeding Rs 25 lakh, approvals from the administrative department and the finance department are mandatory. In giving the approval, then finance secretary, Dilip Jawalkar, said in his June 20, 2023, letter that the consultancy fees should be justified on the basis of the firm's agreements with other governments, wherein the same firm has secured the work through a competitive process. He also said that the department should justify the rate reasonableness based on a market survey and after comparison with the rates discovered through a bidding process for similar or comparable assignments for the Uttarakhand government. 'The department should get a formal consent from the Forest department before taking the proposal before the Cabinet, since the general impression is that the Forest department keeps changing its decisions and fails to honour its commitments,' he said. One of the officers in charge of the consultancy process, Satish Bahuguna, said that the Uttarakhand Tourism Development Board was not aware of the 'opinion' of the finance department on the matter, and whether the market survey suggested was conducted. 'This is the opinion of the department. If it goes to the cabinet and approval is given, the decision stands over any suggestions,' he said. Jawalkar told The Indian Express that their responsibility is to 'give advice on the file of the department'. 'What department does subsequently is not in our purview,' he said. The then tourism secretary, Sachin Kurve, did not respond to calls and messages seeking a comment. Aiswarya Raj is a correspondent with The Indian Express who covers South Haryana. An alumna of Asian College of Journalism and the University of Kerala, she started her career at The Indian Express as a sub-editor in the Delhi city team. In her current position, she reports from Gurgaon and covers the neighbouring districts. She likes to tell stories of people and hopes to find moorings in narrative journalism. ... Read More
Hans India
24 minutes ago
- Hans India
Demand for rooftop solar plants rises significantly
Visakhapatnam: Following an encouraging demand for rooftop solar power units for domestic consumption, the Andhra Pradesh Eastern Power Distribution Company Limited (APEPDCL) achieved a target of installing 15,000 solar units under its jurisdiction. Thanks to its continuous awareness drives, the demand for the rooftop solar plants has increased in a drastic manner over the months. Sharing details, APEPDCL Chairman and Managing Director Prudhvi Tej Immadi informed that a new record has been set by installing 10,000 rooftop solar plants for residential households between 2024 to 2025 April under the company's jurisdiction. 'Interestingly, 5,000 units were installed in just two months of time,' the APEPDCL CMD mentioned. The APEPDCL is receiving an overwhelming response from domestic consumers for the PM Surya Ghar Muft Bijili Yojana that provides subsidy based grid-connected rooftop solar plants. By the end of June this year, Prudhvi Tej Immadi informed that 15,120 rooftop solar plants with a capacity of 50,002 kilowatts have been installed for household consumers and they benefited to the tune of Rs 115 crore in the form of a subsidy. Due to the presence of a number of apartmentcomplexes, it is not possible to set up individual solar plants for them. However, if the consumer has another individual house within the same division, the facility could be provided by setting up a rooftop solar plant, exporting the renewable energy generated from there to the EPDCL grid through a virtual net metering method and it could also be used in the apartment house. According to the recent data, consumers are showing interest in availing virtual net metering systems introduced recently. With increased power bills, the system gains popularity as it offers an opportunity to consume enough energy for the house for 20 years. Solar plants with a capacity of 5,054 kilowatts were installed for 1,650 consumers in Srikakulam district, solar plants with a capacity of 4,845-kW installed in 1,549 houses in Vizianagaram, 7,511 kW for 2,056 residences set up in Visakhapatnam, 3,827-kW for 1,239 individuals in Anakapalli, 5,815 kW for 1,676 people in Kakinada, 5,818 kW for 1,716 houses in East Godavari, 5,898 kW for 1,794 houses in West Godavari, and 7,298 kW for 2,199 people in Eluru availed the facility and are connected to the grid. Highlighting the advantages of the rooftop solar plants, the APEPDCL officials appealed to the consumers to avail the opportunity so that they could reduce their electricity bills. Consumers who want to set up a solar rooftop plant with a capacity of one kilowatt should have at least 100 square feet of space over the roof. Explaining further, APEPDCL CMD stated that a subsidy of Rs 30,000 is provided to those who install a solar plant with a capacity of one kilowatt, Rs.60,000 for 2 kilowatts, and a maximum of Rs.78,000 for 3 kilowatts. BCs will get an additional benefit of Rs.20,000 as subsidy. A house with a capacity of 3 kilowatts will generate at least 360 units per month. This can be catered to household needs and the generated power allows the resident to earn an additional income by selling it to the power distribution company, the CMD encouraged. To avail the scheme, consumers can apply through the PM Surya Ghar scheme portal and set up solar rooftop plants from any of the 347 vendors empanelled with it. The APECDCL CMD clarified that there is no need to pay any fee for the application or for the net meter and consumers can contact the toll free number 1912 for more details.
Hans India
24 minutes ago
- Hans India
Fare Double: OLA, UBER, RAPIDO And Other Cab Aggregators Can Now 'Charge Double Fare'during Peak Hours; Govt Approves
New Delhi: The Road Transport Ministry has allowed cab aggregators to charge up to two times the base fare during peak hours, as against 1.5 times earlier, while for non-peak hours the fare has to be a minimum of 50 per cent of the base fare. In its 'Motor Vehicles Aggregator Guidelines 2025', the ministry said, "The aggregator shall be permitted to charge a minimum of 50 per cent lower than the base fare and a maximum dynamic pricing of two times the base fare specified under sub-clause (17.1)." Moreover, the base fare chargeable shall be for a minimum of three kilometres to compensate for "dead mileage" -- including the distance travelled without a passenger and the distance travelled and fuel utilised for picking up the passenger(s). As per the guidelines, the fare notified by the state government for the respective category or class of motor vehicles, shall be the base fare chargeable to passengers availing services from the aggregator. States have been advised to adopt the revised guidelines within three months. In case of cancellations, a penalty of 10 per cent of the fare not exceeding Rs 100, shall be imposed on the driver, if the cancellation is made without a reason identified as valid by the aggregator. A similar penalty will be imposed on the passenger when such cancellation is made without a valid reason. The guidelines said the central government shall develop and designate a portal to enable for single-window clearance of application for licence as aggregator. "The licence fee payable by the aggregator shall be Rs 5 lakhs and the licence shall be valid for a period of five years from the date of its issue," it said. Aggregators have been mandated to ensure that drivers have health and term insurance of at least Rs 5 lakh and Rs 10 lakh respectively. The guidelines also specified that a grievance officer shall be appointed by the aggregator. "An aggregator shall not onboard vehicles which have been registered for more than a period of eight years from the date of initial registration of the vehicle and shall ensure that all vehicles onboarded by it should not have exceeded eight years since the date of initial registration of the vehicle," as per the guidelines.
