Broking house, P-sec is bullish on Nicholas Piramal and has maintained buy rating with a price target of Rs 268.
P-sec report on Nicholas Piramal:
"Nicholas Piramal reported 31% yoy growth in the topline during Q1 FY07 and 7% yoy growth in the net profit during the same period. Lower growth in the bottomline was mainly because of Avecia loss and poor growth in domestic formulations business on account of Valdecoxib and VAT effects. The company has wide presence in nine therapeutic segments including Respiratory, CVS, CNS, Anti- diabetic, Bio-technology etc which accounts for 90% of the market."
"Pathlabs segment is growing at strong 33% yoy and the company has indicated this growth rate to continue. We expect it to grow at 12-13% over next couple of years as compared to 8-10% market growth rate."
"At CMP of Rs 217, the stock is trading at 19.7x FY07P and 14.5x FY08E earnings and is trading at discount to its peers like Divis's Labs, Dishman Pharma and inline with Jubilant Organosys. We recommend a buy on the stock with a target price of Rs 268."
