Investment Ideas in Pipeline
Dabur pharma
Background:Demerged from Dabur india in 2004. this is into oncology products (cancer treatment), which is highly profitable and has high entry barriers. Recnetly sold off Non oncology business to Alembic for 160 crores(15% of Market cap of dabur pharma), using this proceeds for setting up marketing office in US.
Future prospects: in next two years 8 to 9 billion dollor cancer products are going off patent in US , Dabur pharma is big contestant for this products, even if they garner 10% of it , that will be huge boost to sales growth. Given that only 9 companies worldwide are competing for this market the chances of getting 10% mkt share are high.
Catalyst: Insider buying worth 80 lacs in June 2007.
Wire & Wireless: Demerged from Zee TV in Feb 2007. This is into cable business, (old name was Siti cable). This co is running in losses for the past several years because the Local Cable operators(LCOs) were under disclosing the number of subscribers.
Short run Triggers: Implementation of CAS because of which customers have to opt for set top box and this wil help in knowing the right number of subscrbers. So form next few quarters onwards sales are expected to zoom. one more catalyst is allowing Foreign investment in this sector, many forigh players like Liberty media are interested in indian cable industry and are willing to pick up stake in Wire and wireless.
Long term triggers:In long run there is strrong reason for which peopole will opt digital cable connection(cable with set top box), the reason is that the cable can deliver brodband internet connection, this is called triple paly (content+data+voice), customer gets channels+ internet+ can make voice call thru the existing cable. once the cable guy offers all these services revenue per subscriber will zoom.
Risks: Current Indian government (coilation) is not fast enough to make all the required regulations in time (like foreign investment and revenue sharing etc), because of this chance of DTH(direct to home, Tata sky and Dish tv) overtakng cable guys are more in short run. In long run DTH inherently can not compete with cable as they can not offer viable broad band and voice services.
Hinduja TMT: this is also a cable company demerged in MAy 2007. same story as above.
posted by jagadish @ 2:20 PM
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