FinQuest Securities is bullish on Wockhardt and has recommended buy rating on the stock with a target of Rs 1400 in its August 10, 2012 research report.
“WPL reported Q1FY13 revenue 9% ahead of our estimate at Rs.14258mn. EBIDTA stood at Rs.5020mn 17% ahead of our estimate of Rs. 4276mn. WPL reported adjusted PAT (pre exceptional) at Rs.3988mn growing 15% Q-o-Q. We have increased our sales forecast for FY13 and FY14 by 4% and Core EPS estimate for FY13 by 8% and for FY14 by 4% factoring exceptional set of growth achieved in Q1FY13. We maintain our strong BUY rating on WPL with a target price of Rs.1400 on a one year time horizon (Upgraded on 27th July post Closure of divestment of Nutrition business) valuing it at a P/E multiple of 14x to its FY13 earnings.”
“WPL continues its dream run in EBIDTA margin expansion on account benefit from INR depreciation vs major currencies and full quarter impact of niche launches in the US like Generic Flonase (Nasal Spray) and generic Stalevo (Parkinson's disease) where the company holds FTF for 180days in four strengths and is authorized generic provider. We have increased our EBIDTA margin expectation for FY13 to 32% from our earlier forecast of 31.2%. We believe WPL coming out CDR is just a formality. We expect the Debt: Equity to fall to 0.3 by end of FY13. Proceed of Rs.12800mn from nutrition business will be used to repay the outstanding debt.”
“We maintain our strong BUY rating on WPL with a target price to Rs.1400 (Upgraded on 27th July post Closure of divestment of Nutrition business) valuing it at a P/E multiple of 14x to its FY13EPS and 14x its FY14EPS. We believe WPL has gone for a multiyear rerating in the last 2Quarter and expects the rerating to continue with its improved financial performance going ahead. We expect the P/E multiple gap between large cap Pharma peers and WPL will continue to narrow down going ahead. Current WPL is trading at 12x of FY13E and 10.5x of FY14E,” says FinQuest Securities research report. Shares held by Financial Institutions/Banks Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions. To read the full report click on the attachment
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