Limited downside in Biocon: Mavani

Limited downside in Biocon, says Vivek Mavani, Vice President & Senior Portfolio Manager, Brics Securities.

Mavani told CNBC-TV18, "Cadila Health does give better comfort in terms of growth visibility, it demonstrates size and scale and ability to maintain margins and return on capital pipeline of new products, etc. I mean its well on its line to be a billion dollar company this year and perhaps USD 2 billion by 2015, so in the next four years it is again going to double on an already high base. So although Cadila has also had a fairly significant run up in the last one year, the stock has got re-rated also, it still gives a significant amount of comfort and margin of safety if I may use that term in this market scenario fraught with volatility." He further added, "Biocon has very limited downside from these levels. Biocon lately has been performing on a consistently quarter after quarter and positive news like we had few months back about the deal with Pfizer. Some sort of positive news flow is expected every few months from Biocon given its own pipeline. It has traded at discount to other generics/API/other Indian pharma companies partly because of lower growth and partly because of certain uncertainties going ahead. In Biocon also management has guided at about 15% growth going forward for the next three-four years which is not so bad if they can consistently manage to do that. I would say Biocon can give an upside of about maybe Rs 450-480 in the next one year in that sense although Cadila is still preferable."