Anand Rathi Securities Ranbaxy Advisory
Anand Rathi securities is maintaining a Buy on Ranbaxy and their logic for the same is as appended below:
The US FDA has approved Ranbaxy’s generic version of Lipitor, enabling the company to launch the product with 180-day exclusivity along with the innovator Pfizer and the authorized generic, Watson. Analysts expect Lipitor to add Rs 31 to Ranbaxy’s EPS during the exclusivity period, assuming 25 per cent profit sharing with Teva.
As per an agreement signed by Ranbaxy with Teva, the former will share profits with the latter during the exclusivity period. Analysts assume 25 per cent of the profits will be shared with Teva. Pfizer’s aggressive steps to retain 33 per cent market share and the agreement with Teva are likely to restrict Ranbaxy’s upside from the Lipitor opportunity. Analysts assume a 45 per cent price erosion and 35 per cent market share for Ranbaxy within the exclusivity period. Maintain Buy with a target price of 584.
Our Verdict
We are of the opinion that till the time the stock remains below 500 level it will remain weak and thus one should enter in this stock only once the stock starts sustaining above the given level.
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