Buy Unichem Laboratories, target of Rs 225: Karvy

Karvy Stock Broking has maintained its buy rating on Unichem Laboratories with a traget price of Rs 225 in its May 16, 2008 research report. "The company's net revenues for the quarter were up by 3.2 % to Rs 1383 million. The growth has been driven by a 11 % growth in domestic formulations business revenues which has been offset by degrowth in exports. Operating margins were lower by 500 bps to 14.2 % mainly on account of lower gross margins and higher excise. Profits for the quarter were higher by 13 % to Rs 153 million."

"We upgrade our FY 2009E EPS nos by 7.3% to Rs 22.1 and maintain our FY 2010E nos at Rs 31.3. We upgrade our price target by 10 % to Rs 225 based on 10.2x FY 2009E. The Company is quoting at attractive valuation of 6.6X FY09E. We maintain our BUY rating on Unichem," says Karvy's research report.

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