Wyeth has target of Rs 1100: PN Vijay

Wyeth has target of Rs 1100 in the next 12-15 months, says PN Vijay, Portfolio Manager.

Vijay told CNBC-TV18, "Wyeth has got a fantastic history. It started in India way back in 1940s as Lederle then there was this merger with Cyanamid. I was also involved in that some more than 35 years ago. Then it followed Geoffrey Manners, the world's leading analgesic producer. And all that became finally Wyeth Lab. In 2009, it got swallowed by the giant Pfizer, which has a 51% stake. So, today Wyeth is a Pfizer company, a part of the Pfizer umbrella globally."
He further added, "Wyeth has got some very strong products in the oral contraceptives segment. In increasing urbanisation and consciousness about family, oral contraceptives are very fast growing part of the pharmaceutical formulations markets. Barrier to entry is very high because government doesn't allow easily manufacturing and marketing of oral contraceptives. They are in the vaccination space. They are the leaders in the vaccine space, Prevnar is champion there. So, they have got some very strong brands."
"The valuation is pretty okay. It about 12 times earnings, which is pretty good these days. There is one risk to the stock. They have got a big case going with the government on the DPCO, Rs 76 crore or so. They are partly provided for that in their P&L. But if the case goes against them and the company ofcourse believes it will not go against them that could hit them."
"The trigger is that there is a certain integration of Pfizer's activities with Wyeth globally and in India. The margins in Wyeth have improved tremendously because a lot of the distribution, the sales network has moved to the Pfizer platform. So, we are getting some strong EBITDA margins."
"It is a very safe pick, nothing to worry about in an anxiety driven market. I would give a target of about Rs 1,100 or so in the next 12-15 months."