Hold Wockhardt: Ventura
Ventura has recommended hold rating on Wockhardt, in its May 29, 2013 research report. According to the research firm, in the short term the stock will remain range-bound backed by the lack of triggers. In the long term we remain positive on Wockhardt, says Ventura.
June 08, 2013 / 13:44 IST
Ventura's research report on Wockhardt
"In Q4FY13, Wockhardt posted a net profit of Rs. 335 crore on sales of Rs. 1,485.5 crore, which compares with a loss of Rs.191 crore on sales of Rs. 1,175.6 crore for the corresponding quarter in the previous fiscal. Sales were primarily driven by the robust global strategy, continued focus on R&D and the commitment and confidence of employee. In FY13, R&D expenses stood at 6.7 percent of sales compared to 5.7 percent in FY12.The US business has grown by 52 percent in the FY13 and 30 percent in dollar term. During the year, the company has launched 12 new products and filed 20 ANDAs. Additionally, it holds 46 ANDAs, which are pending approval. Growth during the year was driven by a number of niche products and FTF opportunities. UK business has grown by more than 24 percent in rupee terms and 8 percent in pound terms as compared to FY12. Over the same period, the company had launched 13 new products and filed for 16 new products.As far as Irish operations are concerned, Wockhardt growth in Ireland is at 13 percent in rupee terms and 7 percent in euro terms. And it continues to be the largest generic player with 20 percent market share. To drive growth further, the company has launched 25 new products over the same period.The domestic formulations business recovered from a weak performance of the past few quarters and grew 12 percent yoy in Q4FY13. The company has launched 21 new products during the year.Wockhardt filed for 162 patents during the year, taking the cumulative filings to 1,733. It has received 52 patents in the year, taking the cumulative patents to 206Though in the short term the stock will remain range-bound backed by the lack of triggers, in the long term we remain positive on Wockhardt. We believe key triggers to drive long term growth are differentiated US pipeline, as well as an improving growth trajectory in its domestic business. Further, the management is pretty confident of resolving the FDA issue soon and is targeting to file 15-20 ANDAs and launch 15+ products every year in the US market, which would help sustain its growth momentum. At the CMP of Rs 1,122, the stock is currently trading at 8.71x and 8.14x of its FY14E and FY15E earnings estimates and we maintain a HOLD rating on the stock," says Ventura Securities research report.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. 
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