Buy Plethico Pharma; tgt of Rs 568: Networth Stock Broking

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Buy Plethico Pharma; tgt of Rs 568: Networth Stock Broking

Networth Stock Broking is bullish on Plethico Pharmaceuticals and has recommended buy rating on the stock with a target of Rs 568 in its September 6, 2010 research report.

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Networth Stock Broking is bullish on Plethico Pharmaceuticals and has recommended buy rating on the stock with a target of Rs 568 in its September 6, 2010 research report.

"Plethico Pharmaceuticals (PPL) is focused on manufacturing, marketing & distributing high-quality Herbal, Nutraceutical & Allopathic products, pharmaceutical formulations & allied healthcare products domestically & globally. It has a strong portfolio of health & wellness brands which is sold globally through a pervasive network in regulated (US & EU), emerging (CIS, Africa & Third-front) & domestic (Indian) markets. For CY09, PPL had consolidated revenue of Rs 1243 crore, EBITDA of Rs 243 crore, (19.5% margin) & PAT of Rs 217 crore (17.5% margin). EPS was Rs 63.7 on equity of Rs 34 crore. For H1CY10, consolidated sales rose to Rs689crs, EBITDA to Rs 160 crore (23.2% margin) & PAT to Rs 133 crore (19.4% margin), half-yearly EPS of Rs 39.2."

"Currently, the stock is trading at 5.3x 4.6x its CY10E & CY11E EPS of Rs 75.8 & Rs 87.4 respectively. We believe that the apt (one-year forward) multiple would be 6.5x & thus fair-value for PPL is Rs 568.2. Comparatively cheaper valuations than segment-peers would provide additional thrust for the up-move in the stock-price. We recommend "BUY" rating on PPL at current levels with an upside potential of 42.1%," says Networth Stock Broking research report.

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