Last year I wrote on Suven Life Sciences, also I did some secondary level maths to get a sense of returns an investor could get buying the business at then market cap (~2000 INR Crores or 400 Million USD) and exiting in 2024

See Snap shot below

The base case CAGR didn’t excite but reading management commentary compelled me to take a tracking position in model portfolio

Over to this year

One thing in AR gave me a Jeff Bezos moment

For the first time management was sounding optimistic (this is coming from a management which is very conservative on record)

Emphasis mine

Management views on past

Despite having grown the business every single year across the last five years, our business sustainability has been consistently questioned. We are perceived as a high risk service-based business marked by volatile quarter on quarter earnings because successful project completion may not necessarily translate into repeat orders if the project does not carry through at the innovator’s end

Management views on Future

The big message that I wish to send out is that this reality is likely to change. The volatility in our business model may moderate extensively following the commercialisation of

Previously I have written on CERA here & here

Let’s try and summarize key messages from 2015 annual report

The headlines

1. Sales up by 23%
2. Net profits up by 30%
3. 3,51,000 equity shares issued on preferential basis
4. Company also entered into competitive tiles market with exclusive tie up with manufacturers of tiles
5. Company has set up Wind Turbines of 11.825 MW and 1.00 MW Solar Plant which will generate about 90 % of the requirements and it will offset against monthly consumption of energy bill

Management focus

The growth of your Company, much above the market growth, is largely on account of its continued efforts in leveraging the high brand value and product optimization besides deeper penetration in tier 2 markets. These efforts are further fortified by strong and structured marketing efforts, good product quality and after-sales service, and backed by a very loyal distribution network across India.

Increasing distribution strength – This is helps company to push new products (like tiles) through existing channels

Improving Product quality – Especially as many products sold are not made in house

Marketing

Your Company’s two-pronged aggressive marketing push of mass media advertising over television and print and partnering with industry organisations like

… Read the rest

Read more