MARKSANS PHARMA

I believe one should buy this stock on every dip. I think this is one stock which has the potential to make you rich. Why do I think so?

For once, the parentage. It is as impeccable as it can get. Remember Mark Saldanha? Yes, the CEO of Glenmark. The company that has earned fabulous profits through research and through commissioning its new molecules to Forest labs and other foreign drug companies. Well, Marksans too belongs to Mark Saldanha.

Look at its balance sheet for last year. Or if balance sheets give you the cold sweat, look at the profit and loss account available on the BSE site (www.bseindia.com). Click "notes" and you will see the reason why the profits are so depressed. The entire research expenditure has been charged to the profit and loss account and that is why the profits are so depressed. That tells you two things: Actual profits are more and that the company has dabbled heavily into research. With the track record of Glenmark in the research field, one can believe that Marksans too will be successful here.

Are there new molecules that Marksans is working on. Yes. One is RISUG. This is an injectible male contraceptive which will obviate the need for vasectomy. The drug is in the third phase of clinical trials and is due to be launched shortly. You can imagine what will this do to the financials of the company if it makes it through the last phase of clinical trials.

The second molecule is a female contraceptive and the third an anti-diabetic drug. But it is RISUG which is almost at the end of the clinical trials. I wait with baited breath for the results of the last phase for RISUG.

Lastly, the stock has fallen so drastically, that the price today is mouth watering. Just go over to any equity quotation site (the one that gives you quotes most easily is www.equitymaster.com/tm.asp) and see the yearly high low.

I think this is one of those stocks that is crying out for you to take a position.

MARICO LTD.

I like this stock. I have held the stock for more than 5 years now and have added more in these years. The last I added it, it was at 55 (post split). It is a wonderful company. It does what I like and search for in a company - innovate. I hardly buy a stock unless I see evidence of innovation. But there is one primary reason that I continue to hold the stock even today and have the balls to recommend it at this price. Read on.

Retailing is a good business to be in - that is evident from the prices of the few scrips that are successful in this business. But retailing is a high volume low margin business. So, when there is enough competition I do not see these stocks doing too well. BUT EVER HEARD OF A HIGH VOLUME HIGH MARGIN RETAILING? WELL THAT IS WHAT MARICO CAN BE ALL ABOUT!

Kaya Skin Clinic is a unit of Marico and with passing years is becoming quite successful too. It already breaking in and turning small profits which are slated to grow phenomenally in the coming years. Now beauty is something that everything wants even if it be skin deep. That is where the high volumes come in. Also, beauty is concept and all concepts are sold always at high margins. You only need to go to your neighborhood beauty shops to find out the truth about this. And when it comes to Marico, the margins are higher still. So, while its hair-care business is doing really well and while its acquisitions (brands and companies) abroad are adding value to its business, it is this high volume high margin business that has attracted me.