Ranbaxy rises after Nomura upgrades stock to 'buy'
Ranbaxy Laboratories shares gained 2 percent on Monday morning after Nomura Financial Advisory and Securities India upgraded the pharma major to "buy" from "neutral." The brokerage also raised its target price on the stock to Rs 475 from Rs 415.
March 11, 2013 / 14:05 IST
Moneycontrol Bureau
Ranbaxy Laboratories shares gained 2 percent on Monday morning after Nomura Financial Advisory and Securities India upgraded the pharma major to "buy" from "neutral." The brokerage also raised its target price on the stock to Rs 475 from Rs 415."The organisational restructuring has brought greater clarity and there is strong commitment towards improvement in margins, in our assessment," it said in a note to clients.Shares of Ranbaxy, owned by Japan's Daiichi Dankyo, are down 20 percent since Dec-end and 14 percent since March 2012-end, which Nomura attributes to delay in launch of its generic version of Diovan (Novartis' high blood pressure drug), recall of cholesterol lowering drug Atorvastatin and poor fourth quarter results.The stock underperformance was also a reason leading to the stock upgrade, analysts Saion Mukherjee and Aditya Khemka said.Ranbaxy has approval from US Food and Drug Administration to launch Diovan generic under 180-day exclusivity, however it is yet to launch the product. Rival Mylan had sued US FDA over Ranbaxy's rights to Diovan, but was unsuccessful. The analysts expect Ranbaxy to launch Diovan under exclusivity in 2013, while Valcyte (Roche's antiviral drug) exclusivity is likely to be pushed to September this year."However, Absorica and Desvenlafaxine are interesting opportunities and the developments so far have been ahead of expectations," they added.Alembic Pharma had last week received US drug regulator approval for Desvenlafaxine base extended release antidepressant tablets. The tablets are a bio-equivalent version of Pfizer's Pristiq (market size of about USD 538 million) and Ranbaxy will market the drug in the US market.Ranbaxy had earlier launched Absorica capsules used for treating acne in the Oct-Dec quarter.The Nomura analysts have raised their earnings forecast on Ranbaxy by 3 percent and say the FDA approval for Diovan and other key products, as well as improvement in base business margins are positive catalysts.At 11:00hrs, Ranbaxy shares were up 2 percent at Rs 411.20 on NSE.Also Read: Amtek Auto surges on acquisition of German Neumayer Tekfor Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
