Buy Stride Arcolab; target Rs 464: Firstcall Research

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Buy Stride Arcolab; target Rs 464: Firstcall Research

Firstcall Research is bullish on Stride Arcolab and has recommended buy rating on the stock with a target of Rs 464 in its November 05, 2011 research report.

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Firstcall Research is bullish on Stride Arcolab and has recommended buy rating on the stock with a target of Rs 464 in its November 05, 2011 research report.

"Stride Arcolab, during the quarter ended, the robust growth of Revenue is increased by 81.16% Rs. 7797.31 million. Strides subsidiary, Onco Therapies Limited (OTL) has received European approval for Oxaliplatin Injection. Net Sales and PAT of the company are expected to grow at a CAGR of 35% & 37% over 2009 to 2012E respectively. Strides Arcolab operates in 14 global locations with an innovative R&D hub in Bangalore & a marketing network in 70 countries. Strategic partners of Strides Arcolab Ltd. are Pfizer, Sandoz, Teva, Novartis, Aspen, Apotex, Martindale, Sagent, ICN, Actavis and GlaxoSmithKline."

"Stride Arcolab Ltd. has posted net profit of Rs 464.69 million for the quarter ended on September 30, 2011 as against Rs 345.77 million in the same quarter last year, an increase of 34.39%. It has reported net sales of Rs 7797.31 million for the quarter ended on September 30, 2011 as against Rs 4304.11 million in the same quarter last year, a rise of 81.16%. Total income grew by 81.21% to Rs 7799.28 million from Rs. 4304.11 million in the same quarter last year. Company posted earnings of Rs 7.96 a share during the quarter, registering 8.03% growth over prior year period."

"At the current market price of Rs. 411.35, the stock is trading at 10.02 x CY11E and 7.86 x CY12E respectively. Earning per share (EPS) of the company for the earnings for CY11E and CY12E is seen at Rs. 41.05 and Rs. 52.36 respectively. Net Sales and PAT of the company are expected to grow at a CAGR of 35% and 37% over 2009 to 2012E respectively. On the basis of EV/EBITDA, the stock trades at 4.12 x for CY11E and 3.49 x for CY12E. Price to Book Value of the stock is expected to be at 1.56 x and 1.29 x respectively for CY11E and CY12E. We expect that the company will keep its growth story in the coming quarters also. We recommend 'BUY' in this particular scrip with a target price of Rs 464 for Medium to Long term investment," says Firstcall Research report.

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To read the full report click on the attachment