Hold Ranbaxy Laboratories: P-Sec

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Hold Ranbaxy Laboratories: P-Sec

Broking house, P-Sec has maintained hold rating on the Ranbaxy Laboratories.

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Broking house, P-Sec has maintained hold rating on the Ranbaxy Laboratories .

P-Sec report on Ranbaxy Laboratories:

"Ranbaxy Laboratories has acquired Be-Tabs Pharmaceuticals, fifth largest and profitable generic company in South Africa, for USD 70 million and will be funded from the company's FCCB proceeds. Be-Tabs Pharmaceuticals is the largest manufacturer of Penicillin formulations in South Africa and markets & manufactures a portfolio of ethical and over-the-counter (OTC) solid-oral and liquid formulations in South Africa. With this acquisition Ranbaxy's sales in South Africa is expected to go up to USD 55 million from current USD 24-25 million."

"The acquisition is EPS accretive and the deal has been valued at 2.2 times of sales and 7.7 times of EBIDTA multiples. At CMP of Rs 391, the stock is trading at 26x CY06E and 21x CY08E earnings. We maintain hold on the stock."