Expect 30% upside in Plethico Pharma: A Maheshwari

Ashish Maheshwari, MD of India Capital Markets is of the view that one can expect 30% upside in Plethico Pharma in 12 months time.

Maheshwari told CNBC-TV18, "Plethico Pharma is not into the crowded generic kind of a business but it is in a high margin herbal and neutraceutical kind of a business. The recent acquisition of Naprol Corp in the US will also help them to foray into a quite lucrative US markets. So if we see their further plans, they are also setting a base in the UAE and with high promoter stake, there is very little floating stock available in the market. Besides this, if we see the stock price movement also in the last one month, the Sensex has lost almost 3,000 points but this stock is stable at Rs 385 to Rs 420 levels, which were one month back also."

He further added, "Earnings wise this stock is available at a PE multiple of 6 from the FY09 earnings and the price earnings multiple of 4 from FY10 expected earnings. So this is one of the cheapest steady kinds of a stock in the pharmaceutical sector. We are recommending this stock with an upside of 30% from here in 12 months time. "
 
Disclosure: Analyst doesn't hold the above stock but have recommended to the clients.