Buy Coral Laboratories on dips, says Prakash Diwan

Prakash Diwan of prakashdiwan.in told CNBC-TV18, "This is a daring move in phase where pharmaceutical has been getting phased out. People are getting kind of tired and worried about pharma stocks. However, what I liked about Coral Laboratories is it is niche player.""It has been in the market for a fairly long time and it is into whole array of products which are decent on margins but they don’t have any regulatory overhang and headwinds because they don’t supply to the US, they supply to what is called the less regulated markets. They have started making some induce into Europe but not very seriously yet.""In India they are quite well intrinsic especially in the western and southern part of the country with antibacterial, antibiotics, injectables, syrups, cough syrups and tablets everything you have on most of which is OTC. So, of course a lot of prescription drugs also forms the part of the portfolio. The management has run this plant so efficiently that the margins have always been very strong and very constant. They have been no ups and down a volatility in that," he added."They are getting into a trajectory where I think growth would be even faster, so if you look at the EPS today at Rs 26 it is just trading at about 16 times. Cipla was 32 plus or a Glenmark Pharma is again that 34-35 x times, so you have a huge differential between these companies and some of these well known names.""We are not comparing this with Shasun Pharmaceuticals or Ajanta Pharma which are also different league. So, these are under priced stock which will not give you volatility but you could buy them at dips. They will see a little bit of choppiness. However, undervalued company, with a decent management which could give you very decent returns from here on," he added.