Wednesday, 29 October 2008

Buy Dishman Pharma, target of Rs 250: Karvy

Karvy Stock Broking has maintained its buy rating on Dishman Pharmaceuticals & Chemicals with a target of Rs 250 in its October 29, 2008 research report. "The net revenues for the quarter reported at Rs 2.52 billion with 35.1% y-o-y and 6.8% q-o-q growth rate, against our estimates at Rs 2.43 billion. The net profits for the quarter before exceptional items stood at Rs 339.87 million. The company maintains its guidance of reporting Rs 10500 million revenues in FY09 with 23% to 24% margins at EBITDA level and operational PAT to the tune of Rs.1500mn."

"We maintain our revenue and earnings estimates for FY09E & FY10E. We expect revenues and earnings to grow at a CAGR of 31.4% and 27% from FY08 to FY10E driven primarily from the high margin CRAMS segment. The stock is currently available at P/E of 6.9x on FY10E basis. On account of compressed valuations, we downgrade our PE multiple from 13.1x to 10.5x on FY10E diluted EPS at Rs 23.6 and revise our price target downwards by 24% to Rs 250. We continue to rate the stock as a "BUY," says Karvy Stock Broking's research report.

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Source: Moneycontrol

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