Sep 18, 2013, 04.04 PM | Source: CNBC-TV18
Mayuresh Joshi of Angel Broking is of the view that one may exit Wockhardt on rallies.
Mayuresh Joshi (more)
Fund Manager - PMS, Angel Broking | Capital Expertise: Equity - Fundamental
“Having said that, one must also realise that the kind of Abbreviated New Drug Application (ANDA) applications from the Waluj unit is almost close to 46, out of which 12 have already been filed. Again if you look at their other plants, Chikalthana and Shendra, Chikalthana has received Form 483 which basically is some nonconformity with good manufacturing practices (GMP). So one really needs to find out whether this will really convert into an import ban for that unit as well which can have a detrimental effect onto the stock,” he added.
“In terms of the analysis of their Q1, the profits came at around Rs 324 crore against Rs 378 crore and the topline was just around 1.5 percent higher. So in that sense itself the Q2, Q3 numbers will be keenly watched out for and the kind of impact that these observations would possibly have on Wockhardt's balance sheet.”
“So unless the investor has a very longish view on the stock I think the short-term impact on the stock prices can be quite harsh like we have seen in Ranbaxy and if there is some adverse news on stock I think the stock can correct equally drastically. So with the couple of quarters view, the stock can majorly be prone to news and market movements, but on long term and we assume that the plants in Chikalthana and Shendra receive a go ahead and even the consent decree that one has on the Waluj plant, I think they are able to resolve that over the next 2-3 quarters, I think the incremental revenues will start flowing in a couple of quarters after that.”
“One needs to really have a longish view on the stock, otherwise on a shortish view one can exit the stock on rallies and possibly look at better counters within the pharma space, something like a Sun Pharma or a Lupin on declines."
Wockhardt has submitted a copy of minutes of the 1
Sharmila Joshi of sharmilajoshi.com is of the view
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