KR Choksey has come out with a report on Cipla' Q2FY10 earnings. The research firm recommended a hold rating on the stock with a target price of Rs 335.

"Going forward, we believe that Cipla would post good growth numbers in the coming quarters as we expect strong growth in the Anti AIDs drugs. We expect the margin of Cipla at the operating level would remain in the level range of 25-26%. We expect, new product launches like Salbutamol, an inhaler in Europe, by end of 2010 as well as bio-similar products will drive the growth ahead. Thus we expect, Cipla to outperform its own guidance for FY10E of 10%-12% growth in both top-line as well as bottom- line. At the CMP of Rs 287, the stock is trading at 23.0x FY10E EPS of Rs 12.5 and 17.4x FY11E EPS of Rs 16.5. We have valued the company at FY11E P/E multiple of 20x, deriving a valuation of Rs. 335 per share and recommend Hold rating on the stock. Historical company has traded at one year forward P/E of 18x.", says KR Choksey.

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