Buy Cipla; target Rs 453: Firstcall Research
Brokerage house Firstcall Research is bullish on Cipla and has recommended buy rating on the stock with a target price of Rs 453 in its August 14, 2013 research report.
August 20, 2013 / 18:56 IST
Firstcall's research report on Cipla
"Cipla has posted strong Q1 numbers with a jump of 25.8 percent in net sales and net profit increased by 18.5 percent. EBDITA or operating profit of the company also increased by 25.57 percent in Q1 compared to corresponding quarter in the previous year. The results posted by Cipla were against analyst expectations as the sales of the company had fallen in the previous two quarters. Increase in operating income has been a whopping 340 percent in Q1 FY14 which has contributed to the increase in the total income of Cipla.""The share of operating income in Q1 FY14 has increased to 7 percent from 2 percent in Q1 FY13. Other income has also increased by 30 percent and expenses to total income improved by 18 basis points in Q1 over the corresponding quarter in the previous year. The financing costs is a cause of concern for the company which has increased 16 times as the short term borrowings have increased in the form of unsecured packing credit obtained by Cipla. But the company has high current investments of Rs. 20874.6 mn and Cash and Cash equivalents of Rs. 1050.7 mn as on 31st March 2013. The domestic business increased by 16.7 percent to Rs.11320 mn in Q1 FY4 from Rs. 9700 mn in Q1 FY13. The exports also increased by 20.7 percent in Q1 over the corresponding quarter in the previous year. Cipla is one of the best defensive bets in the present volatile scenario. Thus we recommend 'BUY' for the scrip with a target price of Rs 453," says Firstcall 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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