A view on the pharma space in AstraZeneca, Lupin, Laurus, Zydus Life, they are all firing away. Any stock within the pharma vertical that you like. Anything else that you are watching out for?
Vinit Bolinjkar: So, we just recently initiated coverage on Indoco Remedies. This stock is absolutely available at meltdown valuations, very-very low downside and the company has taken significant measures to elevate the drop in margins which we have seen in the last year. So, we are expecting over the next couple of quarters margins to come back. And they have done sufficient investments, almost 400 crores invested over the last couple of years. Another 200 crores of capex on the cards. And we believe that the company can easily clock 16% to 17% top line growth over the next two-three years.
So, given that kind of environment, I believe that Indoco Remedies is a stock which is going very cheap, available at cheap valuations and the management is pretty well embedded in the business, they have been around for 30 years.
And their product range is also very-very strong. They have taken a lot of remedial measures in the US in terms of strategy where they are going, setting up their own subsidiary and so earlier they were doing dossier sales and partnerships, so that is going in with their own subsidiary in the US. We expect margins to go up. Also, they are carving out a new subsidiary within themselves, which will cater to OTC products.
They have Sensodent which is a very strong brand, commands 90% share of the dental medicated market and we think that this brand can really fire away. So, next three years looks very good. One of the cheapest stocks on a PEG ratio and good ROICs. So, it is a thumbs up from me. And I think 700 to 1000 can be the range for the stock over the next three to four years. Have to get your opinion on the entire defence pack and especially these two names, Mazagon and Cochin Shipyard.
Vinit Bolinjkar: I personally think that they are in very bubbly territory. The valuations are very rich, but the momentum is very high out here. And the order wins are good. But if you really want to take a fundamental view in terms of the valuations, I think they are a little stretched out here. And while we obviously would not want to ask people to sell, but you have to be very careful with these trades out there.