Wednesday, November 26, 2008


In these times of global turmoil, we need to look at companies with promoters having credentials of coming through downturns and Alembic is one company which has done it so far. Alembic is a 100-year old
company, which itself indicates a management that has survived well through all the tough times.

About the company:-

Alembic is a fully integrated player in Anti-infective segment which is the largest segment for this company accounting for over 60% of sales. Alembic has its presence in over 75 countries globally by a chain of agency tie-ups and user tie ups. The company has a distribution network that spans 29 states in India and has manufacturing facilities in Baroda and Baddi.

Recent development:-

The stock has come down from a high of Rs 108 in Nov 2007 and now the stock is consolidating at current price. The buy-back activity is scheduled to start on 8 Dec 2008 and investors can buy this stock at CMP of around Rs 30 for stable returns. Important thing is that the company will itself support the price and as a result the downside is limited in the stock. As investors we have to buy with some margin of safety, and this development assures us the same thing. Buy-back itself stresses the confidence of the management in the company valuation and no company can complete a buy-back if it does not have enough cash.

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