Buy Recommendation – Piramal Healthcare
Investors with a long-term perspective can consider accumulating the stock of Piramal Healthcare, company with a strong presence in the domestic pharmaceutical market, established relationships with several global pharma majors, and its firming hold over the high-margin inhalation anesthetics space. Valuations too appear reasonable. At current market price of Rs 397, the stock discounts its estimated FY11 per share earning by about 15 times.
Piramal’s increasing domestic market presence offers it a considerable long-term growth potential. The company has been improving its market share going by its better-than-market growth in six out of the seven last quarters. While growing competition, with MNCs too entering the fray, could throw up challenges, Piramal’s large field force and growing focus on tier-II and semi-urban cities will provide it an edge.
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