Don't buy Ranbaxy, says Mehraboon Irani

Mehraboon Irani of Nirmal Bang Securities told CNBC-TV18, "We have become quite underweight suddenly in pharma. I think the price control order has largely been ignored according to my pharma analyst friends. We see a sharp drop in topline of some of the pharma companies going ahead. In terms of valuations, I think most of them are quite rich. We continue to favour Sun Pharma, Lupin and my favourite Glenmark Pharma. But all of that in terms of valuations are rich. Now the company which is attracting our attention now is Biocon."

He further added, "Ranbaxy is the most difficult company to understand in the pharma sector. In the last four-five years it has underperformed widely as compared to the pharma index. And looking at the way the problems are right now, just trying to buy into it because the stock has come down, this is not something which I will advice investors." "I was always negative on the stock and remain negative despite the fact that quite a few people feel that negatives are now discounted. I don’t believe that one should be buying into a stock just because the stock has come down sharply. People should be buying because the stock will go up and I don't see any reasons why Ranbaxy should be going up in a hurry at least from the present levels.