Update on Unichem Laboratories

I had discussed about promoters buying shares of Unichem Laboratories on September 15, 2011. The share price was hovering at INR 144 at that time. I had advised the readers to wait for INR 100 to enter the scrip. The share price did go to INR 100-110 between November and December but bounced back sharply and went to INR 160 in January and is still trading at INR 132 and change. But the promoters are still buying shares from open market as can be seen in the transactions below:

Date	Transaction	Quantity	Price	Holding after Transaction
December 16, 2011	Buy	5,037	108.46	11,055,157
January 1, 2012	Buy	2,909	120.28	11,058,066
January 5, 2012	Buy	20,877	120.5	11,078,943
January 6, 2012	Buy	21,920	117.88	11,100,863
January 9, 2012	Buy	25,520	115.78	11,126,383
January 10, 2012	Buy	16,819	113.8	11,143,202
March 7, 2012	Buy	7,987	126.65	11,151,189
March 13, 2012	Buy	43,063	128.75	11,194,252
March 15, 2012	Buy	167,412	130.74	11,361,664

The promoter P. A. Mody's stake in the company has gone up to 12.39% from 11.61% in the August, 2011. The average buying price this time is INR 126.17. Even the latest results from the company puts the diluted EPS at INR 9.09 and the book value is at INR 84. So at the current market price of INR 132, the share is trading at 1.57 times book value and 14.52 times earnings. Even though P/E looks a bit stretched for a small company, remember that they have record low margins this year. The operating profit margin of 12.49% this year is lower than the lowest margin of 14.19% reported in March, 2000, that is twelve years back!!!! If you trust the promoters, then start buying rather than waiting for 100 on the scrip.

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