Biocon came into my eye when I was looking stocks for Intraday saw news related to its stellar quarterly earnings. I booked a good profit intraday basis but the next day, I made a loss in Biocon. I bought that stock for long term at price of 979.21 just seeing their mere fundamentals. Generally, I study everything on the company I invest on but I got over confident (Though I am still not sure why it headed sudden low; I need to study after I get spare time with my web works.) and bought it for long term holding for a span of 2 months.
Lesson Learnt: Markets discount good earnings and news in advance.Market was expecting good quarter from Biocon already and it already got appreciated in the stock price.
Then I am at -8,000 INR as of now. But still I do not see what is fundamentally wrong with it. I am OK with my decision. I have two open positions in my account which is in loss. Well, it is not customary to talk about loses but well, we are human.
If you read this report from Centrum you will see –
“Biocon’s Q2FY17 results were below our expectations. The company reported 20%YoY growth in revenues, 400bps increase in margins to 25.2% and 51%YoY improvement in net profit as per new Ind-AS. With the approval of insulin glargine in Japan and tentative approval of rosuvastatin tablets in US, it is poised for good growth. The insulin facility in Malaysia has commenced production and is likely to contribute from H2FY17. Key risks to our assumptions are slowdown in the biopharma segment and delay in receiving regulatory approvals for its biosimilar products in developing markets.”
But considering its peers like Aurobindo Pharma (Aurobindo Pharma is trading at 8 times than its book value whereas Biocon is trading at 4 times.) I have chosen Biocon. I expect it to be touching the 2000 club by next couple years.