Supriya lifescience IPO, Should you buy, sell or hold supriya lifescience as a investor

 What should you do in Supriya lifescience IPO after listing?

If you had applied for Supriya lifesciences IPO & got shares allotment then today article is going to be very important for all of you. Even you will get reply on that should you hold or sell supriya lifescience stock after IPO listing? Should you buy or sell supriya lifescience ? Before reaching at any conclusion we have to understand the business model of the company & its financial results.

Question:

What is the business model of Supriya  lifescience Company ?

Answer:

Supriya Lifescience is an company which  is on the tips of investors because of its products demand in the healthcare segment. Company has main focus on manufacturing of Active pharmaceutical ingredients (APIs). As per the company management speech, currently more than 38 API’s company is producing. Main focus on the diverse therapeutic segments which includes antihistamine, analgesic, anaesthetic, vitamin, anti-asthmatic and anti-allergic & demand of such medical products will never come to an end. Where company is manufacturing on API’s here company has also good grip in the export market where it exports Chlorpheniramine Maleate, Ketamine Hydrochloride & Salbutamol Sulphate. As per reports, this company was the largest exporter of such products from India in the fiscal years 2017 to 2021 with more than 86 countries which includes 1296 customers.. 346 distributors. Company has strong demand for its products or API’s from Europe, Latin America, Asia, and North America.

Question:

What are the positive points about supriya life science?

Answer:

1) Company has its own manufacturing facility in Maharashtra almost 23,806 Sq.Mts & recently, company had acquired a plot of land of 12,551 sq.mts for company manufacturing facility to expand. It is a good sign that company has good future outlook & assets quality is also good.

2) company manufacturing f  unit has received approvals from USFDA, EDQM TGA-Australia, KFDA-Korea, PMDA Japan, NMPA,  China, Health Canada for its API products therefore it will help company to export more products  to the relevant jurisdictions.

3) Company had generated revenues from its operations from Europe i.e 17% to 18% in the year ended March 2021. Latin America had contributed to 19.15 % and 12.01 % in the same year. If we will exclude the revenues from India then Asia   had contributed to 29.27 % and 36.76 % of revenue from operation for the year ended March 31, 2021 &  6  month period ended September 30, 2021 which is not too bad.

4) Company has international  customers like Syntec Do Brasil LTDA, American International

Chemical Inc and AT Planejamento E Desenbolvimento De Negocios Ltd & with these clinets company has more than 9 years business relationships.

5) Company promoters has vast experience in the pharma industry & we can say that young talent & experienced management team is running this company. More than 35 years of business experience to the promoters of the company.

6) We can say that Company has excellent financial track record Company margins are continuously increasing, Profit of the company is also continuously increasing, free cash flows & Company is doing expansion by its free cash flows. It clearly shows that company has not interest cost & balance sheet of the company looks attractive.

7) Size of the company is small but valuations of the company looks very attractive. It means company investors & shareholders will earn good profit on IPO listing as well as after listing of IPO. Promoters have left something on table for its company investors. Such kind of companies always good for long term investment.

8) In the last 4 or 5 years track record,  Company had not received any warning letter from USFDA. It is a very good sign for company.

Financial performance of Supriya Lifescience Company:

If we will calculate the last 3 financial years, In FY 19, company had reported net profit of 39.4cr against the turnover of 286cr, in FY 20, company had reported net profit of 73.4cr against turnover of 323cr & in FY 21, net profit of the company was nearly 124cr against the total turnover of 396.2cr. It is a excellent performance of the company. In the 1^st half of FY22 ended September 2022, company had reported net profit of 65.9cr against turnover of 230cr.

Dividend Policy of Supriya Lifescience Company:

In the Financial year 2020, Company had paid 100 % dividend & in FY 21, company had paid 27.03% dividend with the face value of 2rs each & 30% in FY22. It clearly shows that SLL is a investor friendly share & Shareholders of the company should expect dividend in the future too but it all will depend upon the company financial performance in the coming quarters & years. Average earnings pershare of last 3 fiscal years is 12.70rs

Peers comparison of Supriya lifescience in Indian stock market:

Solara Active, Neuland Lab, Aarti Drugs, Wanbury Ltd, and Divis Lab

Question

What are the negative points about Supriya lifescience Company?

Answer:

As of now, there are not much negative point about supriya lifescience company but still we tried to find out some negative points of this company which are ignorable.

1) Size of the company is small on the other had valuations of the company looks attractive. Small size of companies generally do not attract big mutual fund companies  & big investors of the stock market.

2) API’s companies business is not easy to run because it always requires USFDA approval. It always looks challenging. Also such companies have good competition from the market.

 Questions:

Should you hold or sell Supriya lifescience, SLL ?

Answer:

Option 1:

If you are a long term investor then you can hold Supriya lifescience even after its IPO listing. If you are a trader then you can book profit on higher levels & try to take entry after some profit booking in the stock.

Option 2:

If you had IPO allotment shares of SLL then 2^nd option is that hold it with the strict stoploss of 15% to 20 % from the IPO price of 274rs & trail the stoploss. 330rs should be the stoploss on closing basis if you will get 20% upside from the IPO price of 274rs.

Option3:

As Indian stock market is trading at very higher valuation, therefore we will give alert to long term investors for booking profit if you get in any IPO or keep strict stoploss in your traders & investment.

 Question:

What is the long term target of Supriya lifescience stock?

Answer:

Long term price target of supriya lifescience is 335rs+. Investors can hold this stock into their portfolio for 1 to 2 years point of view. New investors can also buy or accumulate Supriya lifescience stock in small number of sets after IPO listing. We may increase of decrease the price targets of supriya lifescience in the future after analysing the financial performance of the company.