Cipla likely to remain in Rs 375-410 range: SP Tulsian

Cipla is likely to remain in Rs 375-410 range, says SP Tulsian, sptulsian.com.

Tulsian told CNBC-TV18, “Considering that Q2 numbers you definitely put Cipla into the top league of the pharma companies because the kind of performance they have posted for Q1 as well as in fact the Q2 has really surprised. But going by this recent news sometimes I am unable to understand the logic, marketing company is acquired on the topline of 2X and the bottomline of 11X.”
He further added, “Sometimes if that company Cipla Medpro is only marketing the products of Cipla I am unable to understand the logic of paying USD 440 million for acquiring the 100 percent or maybe that kind of valuation. Can’t this company create their own marketing outlay if ultimately the survival and the earnings are made by the Cipla Medpro from the products of the Cipla only? So, I find this acquisition to be quite expensive a marketing company at topline of 2X and bottomline of 11X. But yes overall my stance remains positive but the problem with Cipla is that whenever we see the stock moving to Rs 405-410 stock swiftly starts correcting maybe in the form of profit booking and again moves back. So, probably for the time being it seems to be or it is likely to remain in the range of Rs 375-410.”
“I was expecting the stock to breach the resistance of maybe Rs 410-415 after seeing their Q2 numbers where they posted a PAT of close to about Rs 500 crore , I thought that probably it will breach that and move into the new range of about Rs 410-430. But that has not happened but overall positive stance on the company.”