Piramal Healthcare may see 30% upside: PN Vijay

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Piramal Healthcare may see 30% upside: PN Vijay

Piramal Healthcare may see 30% upside, says PN Vijay, Portfolio Manager, pnvijay.com.

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Excerpts from Bazaar on CNBC-TV18 Watch the full show » ALSO READ See previous views by PN Vijay See what other Experts & Brokerages are saying about Piramal Health See messages about Piramal Health

Piramal Healthcare may see 30% upside, says PN Vijay, Portfolio Manager, pnvijay.com.

Vijay told CNBC-TV18, "Piramal Healthcare is an old company they hit the news in a big way when they sold their legacy formulations business to Abbott made a pile, they are still getting part payments and incidentally the last one that came in this quarter they made a forex gain of more than Rs 100 crore because the market had factored in a rupee price for the terms action."

He further added, " Piramal Life Sciences is left with mainly its Contract Research and Manufacturing services (CRAMS) business which is 57% of its topline. It is also in some Over the Counter (OTCs) and in some criticals. It made peace with the US pharma giant Baxter and they have a generic called Desflurane which they would be introducing the US market as it goes off-patent. The interesting thing about Piramal is it has got a lot of cash, they took 5.5% stake in Vodafone - Essar some time ago for USD 640 million and their current assets actually on the books is more than market cap of the company. Imagine you are getting Piramal's operating business free. They are guiding for a 20% CAGR on the topline, the businesses are steady and Piramal's are strong investors in other businesses for profit. Some of their investments are very good in my view. And they on lucky position that they are getting dollar earnings through the balance three payments they have to get from Abbott."

"The stock is trading around Rs 375, it is fallen of the high it reached about Rs 600 when the Abbott deal was announced but we see a 30% upside to the stock to about Rs 500 or so in the next 12-15 months driven by good businesses and a strong cash flow which gives them inorganic growth opportunities."