Macquarie upgrades Wockhardt, ups target to Rs 1700 post Q3

The brokerage had a cautious view on the stock for past year, awaiting better visibility by regulatory issues and future approvals but Form 483 issued by the US FDA in early 2014 on the Morton Grove US facility has now been resolved, which provides significant comfort around the sustainability of the remaining US business.

February 05, 2015 / 12:09 IST

26 Aug, 2025 12:21

Volume

Todays L/H

Moneycontrol Bureau

Macquarie has upgraded Wockhardt to outperform from neutral with a revised one-year target of Rs 1700 (from Rs 410) per share. The shares jumped 2.5 percent intraday on Thursday after it posted firm December quarter results. The stock was up around 10 percent in yesterday’s trade.

The brokerage has also increased FY15/16E EPS to Rs58/65, an increase of 120/110 percent respectively, driven largely by higher UK sales. It states that Wockhardt has more than doubled its field force over the last 2-3 years. New product launches and increasing productivity of sales should help drive high-teen growth in the market going forward, feels Macquarie.

The brokerage had a cautious view on the stock for past year, awaiting better visibility by regulatory issues and future approvals but Form 483 issued by the US FDA in early 2014 on the Morton Grove US facility has now been resolved, which provides significant comfort around the sustainability of the remaining US business.

“A US FDA inspection is due for the newly expanded Shendra plant with the launch of products from the facility into the US market in late FY16. Of the 60 ANDAs now pending approval with the US FDA, 35-40 percent fillings are from this new facility. Inspection and approval of the troubled site by the US FDA from where it lost USD 300-350m in annual sales and has several ANDAs pending approvals would likely be option value in FY17&18,” it says in a note.