In an interview to CNBC-TV18, Nipun Mehta of Blue Ocean Capital Advisors and Devang Mehta of Anand Rathi Financial Services discuss if an investor should buy Ranbaxy amid uncertainty over two of its most important generics – Nexium and Valcyte.
According to Mehta, of late Ranbaxy has been in the news for all the wrong reasons barring its merger with pharma behemoth Sun Pharma, making it a potential trigger for investors to buy the stock.
Going ahead, he sees a lot of upward movement for Sun Pharma and feels the company is a definite buy.
However, Mehta states his concerns over Ranbaxy with respect to USFDA order on generic Nexium and Valcyte. In addition, despite the company’s losses, the stock price keeps inching higher backed by its anticipated merger.
On the flipside, a small setback from Ranbaxy will not impact Sun Pharma as a whole. In fact, the synergies of both the companies together pose a lesser risk than what Ranbaxy poses individually, adds Mehta.
In the overall scheme of things, the company post merger has not declared any alternative plan to manufacture the generics in question, which is worrisome. However, after amalgamation, these two products’ contribution will be insignificant.
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