Broking house, Karvy Stock Broking has recommended Wockhardt a market performer with a target of Rs 440.
Karvy Stock Broking report on Wockhardt:
"Wockhardt has decided to sell Dumax's diary and milk processing unit. It has bought over Dumax to gain access to two main brands Protinex and Farex. The company had to buy this unit as a composite deal with the unit because Royal Numico wanted to exit the country. As Wockhardt has a similar processing unit in Punjab, it makes logical senses to dispose off this unit, as it would mount to duplication of assets."
"The plot is a 32-acre Greenfield diary and milk-processing unit located in Punjab and was set up to manufacture instant formula milk powder and health food supplements. It has a 0.2 million/litre a day milk processing capacity and was set up with a total investment of Rs.1.7 billion. The plant was to commence commercial production in Dec '06."
"According to market sources Wockhardt is in the race to buy Pinewood Inc an Irish company. Pinewood has around 400 employees and sells over 200 ethical and OTC brands in about 30 countries. The deal size could be in excess of USD 100 million."
"On current valuations it is quoting at 16.3x CY06 (EPS Rs 24.3) and 13.5x CY07 (EPS Rs 29.4). Unless the company goes through the acquisition, the company will remain a market performer and it has target of Rs 440."
