Ranbaxy a market performer: Karvy

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Karvy Stock Broking has rated Ranbaxy Laboratories as a market performer with a target price of Rs 587 in its June 20, 2008 research report. "Ranbaxy has entered into agreements with Pfizer Inc to settle patent litigation worldwide involving Lipitor in US ( USD 8 billion) and 7 other countries (USD 2.5 billion). The settlement also involves Caduet USD 400 million (combination of Atorvastatin and Amlodipine)."

"We value the core business of the company at Rs 435 based on 25x CY 2009E basis while we value the FTF opportunity of Imitrex and Valacyclovir of Rs 8.4 in CY 2009E at 6x which translates in a Rs 50 per share value in CY 2009E. As the Nexium upside is a recurring business we value it at 25x and ascribe a value of Rs 65 to it. The NPV for the Lipitor and Caduet is Rs 37 and we ascribe that value. We arrive at a fair value of Rs 587 for the company and rate the company as Market Performer," says Karvy's research report.

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