Gennex labs is a good stock name growing in pharmaceutical sector play in Indian pharma sphere.
But, in the huge world of finance, is it wise to invest in this pharmaceutical stock?
Let’s take a closer look.
Gennex Labs is a good stock for risk taking high reward fishing investors as its a penny stock currently trading at ₹ 6.83
The pharmaceutical industry has sustained momentum since the vaccine bounce – are they a recession-proof investment?
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This year, major global pharmaceutical stocks have performed admirably.
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They are defensive stocks that do well during times of uncertainty.
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Biotech stocks have suffered as a result of the shift to value stocks.
As a result of the pandemic, the pharmaceutical and biotech industries’ stock prices reached a record high.
Big pharmaceutical companies have consistently performed well into 2022, even as other industries struggle with the cost of living crisis and rising inflation.
Investors with broad exposure toward the sector will be able to capitalize on the increased long-term demand for healthcare solutions.
The pharmaceutical industry has changed dramatically in recent years.
Since the Covid vaccines made national headlines, decades of research for blue chip pharma stocks both Indian and foreign like Cipla, Biocon, AstraZeneca, and GSK are beginning to see spring blossom.
But, with an economic depression on the horizon, will the other small-cap pharmaceuticals be capable of maintaining their momentum?
And could now be a good time to invest in biotech companies whose stocks have been falling?
Let us investigate.
Economic slowdown: how recession-proof are pharmaceuticals?
Despite the economic slump, investor confidence has been reasonably resilient since they are regarded safer and more defensive assets.
‘In a recession, food and healthcare are frequently prioritized by customers, and the necessity for medical treatments does not lessen,’ explains Alisa Craig, joint leading investment manager at International Biotechnology Trust.
Indeed, the population of persons over the age of 65 who are most likely to require medical care is expected to double in the next decade.
‘As a result, while medical insurance may be slightly reduced, resulting in some price pressure, particularly for non-essential treatments, cumulative pharmaceutical and biotechnology sales, particularly of products that treat circumstances, are unlikely to be significantly affected by a slowdown in economic growth.’
Gennex Labs is a good stock ?
How can investors know which investments are the best?
‘An investor should hunt for a company with solid R&D, a strong pipeline, and a proven record of delivering on that pipeline,’
‘You need a lot of eggs in your basket.’
‘We looked at the broader trend… we want to invest in firms that serve that R&D world.’
The field of biological sciences and tools…
There is a demand for services, but we are not entirely dependent on the performance of a single product or study.’
Companies expected to benefit from this trend include Gennex Labs that specialises in science research and has just obtained a drug trials firm.
Gennex labs is a good stock to buy, comparison with other peers
About
PRUDENTIAL PHARMACEUTICALS Limited was established on June 25, 1985 in the state of Karnataka as Pharmasia Drugs and Chemicals Private Limited.
The company was subsequently relocated to Andhra Pradesh.
The Company had certain plant and machinery at the time of takeover, which are detailed somewhere else in the prospectus, and had also placed orders for certain further plant and machinery.
Following the acquisition, the corporation under new management began implementing the project in full swing
The products were selected, additional equipment (other than what was already available and purchased) was acquired, and the labor needed to complete the job was employed.
The trial production was finished in September 1995, and commercial manufacturing established.In december 1995 the company was renamed to Gennex Labs.
Pros
- Gennex Laboratories Ltd (Gennex Labs) is a pharmaceutical company that manufactures bulk medicines and their compounds.
- The company was established in 1990 and currently employs 121 people.
- It sells to customers both domestically and internationally.
- Gennex lab also intends to expand into new areas of genetic medical sciences, such as API development and genome mapping to heal congenital illnesses.
- The company’s senior officials said they expect to expand its market capitalization to large cap status, but this will be a long process because the company has certain red flags.
Cons
- The stock is currently trading at 2.94 times its book value.
- Despite posting consistent earnings, the corporation does not pay dividends.
- Over the last five years, the company has had a 7.88 percent increase in sales.
- The promoter’s stake is small: 22.05 percent.
- For the last three years, the company has had a low return on equity of 8.73 percent.
- Debtor days have risen from 54.49 to 67.44.
Peer Comparison
Gennex labs is a good stock in the pharmaceutical business, and the following table compares it to publicly traded drug companies. For further deep study of each stock, visit our friend at screener.com.
| S.No. | Name | CMP Rs. | P/E | Mar Cap Rs.Cr. | Div Yld % | NP Qtr Rs.Cr. | Qtr Profit Var % | Sales Qtr Rs.Cr. | Qtr Sales Var % | ROCE % |
|---|---|---|---|---|---|---|---|---|---|---|
| 1. | Divi’s Lab. | 3794.50 | 34.03 | 100732.05 | 0.79 | 894.64 | 78.21 | 2518.44 | 40.84 | 35.04 |
| 2. | Gland Pharma | 2329.70 | 35.16 | 38360.66 | 0.00 | 229.45 | -34.57 | 856.90 | -25.74 | 24.85 |
| 3. | Lupin | 650.00 | 29550.52 | 0.62 | -517.98 | -211.16 | 3883.03 | 2.64 | -7.16 | |
| 4. | Granules India | 308.80 | 18.40 | 7658.42 | 0.49 | 111.00 | -12.99 | 1029.97 | 28.86 | 17.45 |
| 5. | Jubilant Pharmo | 367.90 | 14.19 | 5860.65 | 1.36 | 59.55 | -73.22 | 1527.53 | -3.31 | 9.65 |
| 6. | Aarti Drugs | 439.55 | 20.87 | 4070.23 | 0.23 | 53.00 | 5.49 | 641.48 | 41.90 | 20.73 |
| 7. | Ami Organics | 1008.75 | 51.10 | 3675.05 | 0.30 | 21.28 | 38.18 | 143.54 | 54.54 | 23.67 |
| 8. | Gennex Lab. | 6.82 | 33.01 | 129.41 | 0.00 | 1.07 | -45.13 | 20.18 | 24.49 | 11.78 |
Gennex Labs is a good stock. The results are here :-
If high risk, big gain is your stock of choice, Gennex Labs is a good stock in the somewhat safer defensive pharmaceutical sector.
It is a penny stock that has suffered over the years, but the company is expected to turn around following the recent COVID-19 and subsequent breakthrough in the medical sector.
Keeping all this in mind it would be feasible for investors to consult with their finacial advisors and only invest some percentage of their overall allocated portfolio as at Investo Lingo we believe in the “Not to put all eggs in one basket” approach.
Concluding words
Nonetheless, enthusiasm toward the biotech sector is cyclical, and mechanical pressure here on the sector’s racier end remains significant.
‘Rising interest rates, inflation, and regional instability add to the negative attitude surrounding these assets because the time required to achieve profitability means they are long-term, hazardous investments.
‘Negative forces will continue to cloud the sector’s prospects for certain time. Big Pharma, with its varied product portfolio and many revenue streams, is likely to be investors’ preferred strategy to play the sector for some time. Right now, safety is critical.’
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