In this article we will explore the chance of Tyche Industries Limited as a Multibagger 2021 Stock supported on Value Investing principles. Tyche Industries Limited is manufacturer of pharmaceutical product. The corporate is engaged in producing of active pharmaceutical ingredients (API) and intermediates.
| Website | http://www.tycheindustries.com/ |
| CMP | 188 INR |
About Tyche Industries Ltd Multibagger
Tyche Industries restricted Limited be a manufacturer of pharmaceutical merchandise. The corporate is engaged in producing of active pharmaceutical ingredients (API) and intermediates. The corporate manufactures bulk medication intermediates.
Its active pharmaceutical ingredients embody Racecadotril, Silodosin, Solifenacin Succinate, Tenofovir Disoproxil Fumarate, Rupatadine Fumarate, Glucosamine salt K-lor, Glucosamine salt binary compound, Tiaprofenic Acid, Macrodantin hydrate and Macrodantin anhydrous.
Tyche Industries was incorporated in the year 1998 as Siris Soft. Initially, the company was established as a software company but later on was diversified into the manufacture of fine chemicals. The company is headquartered in Hyderabad, the Pharmaceutical, Biotech & IT hub of India. Tyche is a leading manufacturer of API”s, Intermediates, Nutraceuticals, Fine and Specialty Chemicals. The company focuses on Custom Synthesis/Contract/Toll Manufacturing and Research & Development for API”s, Intermediates and Fine & Specialty Chemicals.
About Product Brands
TIL is one of the largest manufacturers in India of Glucosamine Hydrochloride and corresponding sodium and
potassium salts which are mainly exported to USA and Europe.
The company is deeply committed to quality, safety and environmental regulations. Its manufacturing plants are periodically audited to ensure their effectiveness in meeting tough production targets. Technology is regularly updated and manufacturing techniques are constantly reviewed to ensure they conform to trends.
- Active Pharmaceutical Ingredients (API)
- Intermediates
- Chiral Intermediates
- Nutraceuticals
- Fine Chemicals
The manufacturing plants adopt the latest production techniques and comply with stringent guidelines & requirements of good manufacturing practices (cGMP). The company is in the process of having its plants audited by US FDA and WHO GMP.
| Capitalization | 192 Crore |  |
| Sales Increasing past 3 Years | Yes, 65% | |
| Profit Increasing past 3 Years | Yes, 78% | |
| Durable Competitive Advantage | Yes | |
| Face Value | ₹ 10.0 | |
| ROE | 25.5 % | |
| Debt Equity Ratio | -100.00 |  |
PE Ratio | 8.63 | |
PB Ratio | 83.24% | |
| Intrinsic Value Discount | 93% | |
| Promoter Holding & Increase | 62%, No Increase | |
| Multibagger Returns | 300-500% 5 Year | |
Business and Industry Analysis
India is that the largest supplier of generic medicine globally. Indian pharmaceutical sector trade provides forty percent of generic demand within the United States and twenty-five percent of all drugs in the kingdom. India enjoys a very important position within the international prescription drugs sector. The country conjointly incorporates a massive pool of scientists and engineers UN agency has the potential to steer the trade ahead to a fair higher level. Presently over eighty percent of the antiretroviral medicine used globally to combat AIDS square measure provided by Indian pharmaceutical corporations. Indias domestic pharmaceutical market turnover reached Rs 129,015 large integer in 2018, growing 9.4 per cent year-on-year from Rs 116,389 large integers eventeen in 2019. Indian firms received 304 Abbreviated New Drug Application (ANDA) approvals from the United States Food and Drug Administration (USFDA) in 2017. The country accounts for around thirty percent and ten percent within the United States$ 70-80 billion US generics market. India’s biotechnology trade comprising bio-pharmaceuticals, bio-services, bio-agriculture, bio-industry, and bioinformatics is anticipated to grow at a median rate of around thirty percent a year reach US$ a hundred billion by 2025. The Pharma sector is positioned to grow 12% CAGR till 2025.
Positives
The performance of Tyche Industries witnessed strong sequential improvement in top line. This was backed by a mix of pricing and volume growth. The company could be exploring ways to increase capacity utilization after posting near stagnant sales numbers for the last five years. An operating margin that was ahead of historical numbers suggests that the company could also focus on high margin APIs instead of API intermediates.
- Paying dividend since last 4 years
- Zero Debt Company
- Showing steadily increasing trend in Sales / profits
Negatives
- No clarity on Plant Expansion
- Like with most small companies, there appears to be no proper compliance set-up , else the acquisition of 14.88 % stake by Tyche should have been formally intimated to the stock exchanges when the 5% & 10% stake was triggered.
- The covid situations can delay the company growth
- Foreign Currency Fluctuations affects Import Cost of raw materials
Conclusion
Tyche offers a range of products including Chiral intermediates and Nutraceuticals for the treatment of various diseases. Tyche Plastic has now hit greater visibility in the administrative areas of plastic molds and product molds. The Company is engaged in manufacturing of active pharmaceutical ingredients and intermediates. Now hit greater visibility in the manufacture and processing of active pharmaceutical ingredients and intermediates has helped Us developing.
Summary
This stock Tyche Industries is a 5X multibagger stock india based on value investing principles of warren buffett keeping a long term view.
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