Buy Wockhardt: Ventura Securities

Ventura Securities is bullish on Wockhardt and has recommended buy rating on the stock in its February 20, 2013 research report. According to the research firm, the company is targeting to file 15-20 ANDAs and launch 15+ products every year in the US market, which would help sustain its growth momentum.

"For yet another quarter, Wockhardt surprised the street with stellar performance registering a strong growth of 26% in net sales to Rs 1,435 crore v/s Rs 1141 crore registered in the previous corresponding quarter. This was primarily driven by strong EBITDA margins, which improved by 860bps (38% v/s 29.3% QoQ). The US business was the primary contributor to the growth. Backed by the key product launches with limited competition like Prevacid, Geodon, Stalevo, Comtan, the US business grew at 45% yoy leading to a 26% growth on a constant currency basis. The company's top EU business (excl France) grew 14% yoy mainly driven by UK operations. France business, however, declined 50% yoy. The domestic formulations business recovered from a weak performance of the past few quarters and grew 14% yoy in Q3FY13. On completion of the current restructuring activities, growth is expected to pick up. The company is ramping up its market share in niche products like Flonase, Comtan & Staleveo, Lamictal-XR and other new launched products like Plavix, Geodon, Wellbutrin & Precevid. Wockhardt surprised the street with a stellar performance on the back of higher than expected revenues from its US business The company is targeting to file 15-20 ANDAs and launch 15+ products every year in the US market, which would help sustain its growth momentum. Despite contribution of Toprol XL being lowered this quarter EBITDA margins have seen an uptick indicating improvement in base business margins. At the CMP of Rs 1,916, the stock is currently trading at 13.3x and 11.8x of its FY14E and FY15E earnings estimates and we maintain a BUY rating on the stock," says Ventura Securities research report. Institutional holding more than 40% in Indian cos 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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