Ranbaxy Labs & Lupin-Good stock to buy….
Ranbaxy Labs good stock buy with price target @220..
Ranbaxy reported Q1CY09 results that were lower than our estimates on the back of higher than expected MTM losses of derivative contracts. Its estimated net profits to have declined 72% to Rs 749 million. Overall Ranbaxy reported a loss of Rs 7.62 billion. We value Ranbaxy at 17x one year forward earnings. We add the NPV of one time patent settlements of Rs 50/share to our target price. Hence target price of Rs 220.
Lupin buy with price target @ 850…
“Lupin has settled down with Wyeth Pharmaceuticals, Inc (Wyeth) all ongoing Hatch-Waxman litigations relating to Venlafaxine extended release capsules, the generic version of Wyeth’s anti-depressant “Effexor XR” capsules. As per the terms of the settlement, Lupin will be licensed under the relevant patents and would be free to commercially launch its generic product on or after the first of June 2011 or earlier in certain limited circumstances. Keeping in mind the strong business fundamentals and the growth potential of the company, the recommendation on Lupin is with price target of Rs 850,”
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