On the markets, she said, "They have just done a complete turnaround today and the way they have gone up, has taken us to this new high."
Excerpts of exclusive interview with Sharmila Joshi:
Q: Let us start with PTC, a stock that got a bad reaction from the market but has subsequently recovered. How do the numbers look?
A: The numbers look all right, especially for this quarter. We have seen that the company has done reasonably well whether sales or profits is concerned.
Perhaps, what has not really been so great for the company is the fact that they have actually seen a bit of a slowing down of demand. What they say is that their volume pick up was slightly lower largely because of weather conditions. So the demand for power was not strong.
Overall, on the back of interest that has been shown in their financial arm by private equity players, I think it's quite a decent set of numbers in this quarter. Perhaps you will see the stock recover. Of course, it had run up too much, so possibly because of that it corrected. But as far as numbers goes, I think the numbers were quite good.
Q: What about Sesa Goa? Was that a disappointment?
A: Yes, I think so. If you look over their last year's numbers, they seemed to be on a bit of a downward slide. Also the news that Vedantas had to really put off its open offer may also come as a bit of a blow.
But going ahead, perhaps things could look better with Sesa Goa because you are seeing that the demand for iron ore is strong. So one can take heart from that.
But if you just look at the kind of numbers that they given in this quarter, maybe due to the kind of realisations that they have had, that's showing in their overall income numbers. But it has been a disappointing quarter, I would say for Sesa Goa.
Q: What would you say for HOEC?
A: Really speaking, as compared to the last quarter, the profit numbers are higher. In the last two quarters, their expenditure items were high. But if you compare it with the corresponding quarter last year, whether it is in terms of the income that they have got or the kind of profit that they have got, both are lower.
We had more or less expected this to happen with Hindustan Oil going forward, because they would directly depend on the amount of output that they were getting and that was showing slow down. So this was more or less expected, but I think as far as numbers go, this quarter is a bit of a disappointment.
Q: What about Havells and what sort of price target would you set on the stock now, given what you saw in their numbers?
A: Once again, a very good set of numbers from Havells. If you look at the yearly performance that they have given, there is a steady improvement, whether it is in terms of income or profit over the year.
If you are looking at a company, which is in the electrical equipment space, and you are seeing that they are growing inorganically, now they have SLI Sylvania and they are going to be working this year in integrating SLI Sylvania into their company. So I am sure, they are going to continue this trend.
My guess is it's trading very close to its 52 week high. But to my mind, there is an upside from this level, especially if you see SLI Sylvania starting to add in. I wouldn't like to set a target, but there is an upside from this price.
Q: Is that on its way to be corrected?
A: We have actually commissioned a plant in India. In one of our existing plants, we have built a plant to make this product. So, we will be completely vertically integrated and will come out of the situation in the next few weeks.
Q: There have been issues with the Salutas supplies, and the overall price erosion in the German market. How soon do you think you will be out of this? What is the status of shifting products from Germany back to India?
A: Yes, it should take another two quarters to complete the shifting of the major products. The top 10 products, which contribute 70-80% of the revenues in Betapharm, will be made by Dr. Reddy's, within our own plants.
And the work required for the shifting has been done, and all processes have been completed. We are filing almost every month a couple of products, with the regulatory agencies, and we are going to wait for regulatory approval. That should take about six to nine months to complete and after that, we will be completely independent.
Q: Aptech hasn't reacted too well to its quarterly numbers, but you thought they were okay?
A: Yes, I definitely thought so. For sometime, the company has said that they would be internally restructuring themselves, getting themselves better organised to face the business in the coming years. I think that's beginning to show in their results.
If you see in terms of whether it is the kind of income they have got or the kind of profit after tax they have got, they have shown significant improvement. So definitely this is a number that I liked.
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