The 2nd quarter results for both ALEMBIC PHARMA and LUPIN show a very different picture. ALEMBIC PHARMA had a 83% sales growth and 273% profit growth. While LUPIN had only about 2% growth on sales and a negative growth of above 35% on its profits.
Both these companies were in our investment portfolio a couple of months back. Lupin moved out following the slowdown of its results in March 2015. It was the time the stock made a steep rally to 2100 levels and took a beating after some news in the media that they are facing challenges in the US markets. We made a small profit of 20+% on our investment which was on hold for a couple of months since September 2014.
On the other hand ALEMBIC PHARMA has been a steady performer and we continue to hold this investment which was picked up in the early 2014 at around 200 a share. This investment has so far given us about 200% profits, not very big when compared to stocks that have made more than 500% in a year like CEAT & EVEREADY. While it has been a good investment for the portfolio.
Post our exit in LUPIN, the price of its stock kept moving higher giving us a sticky situation as to, whether we missed a rally in a good stock, because media reports were favouring LUPIN on its performance. We struck to our discipline of not holding an investment if the company is not growing. Now, we don’t have any regrets, in fact we are happy, our system ensures that we are invested in the best businesses across making the BEST POSSIBLE PROFITS to our investors.
Pharma Sector is the strongest in the current markets and among them the Midcaps are the leaders today. Our exposure to Pharma sector is considerably growing too.