Friday, 21 November 2008

Buy Lupin Labs: Prabhudas Lilladher

Ranjit Kapadia, Head – Research, PCG, Prabhudas Lilladher, is bullish on Lupin Labs. Here is how views the stock and how Devangshu Dutta, Consulting Editor, Living Media, views Punj Lloyd and private-sector stocks.

Is Lupin a good buy?

Ranjit Kapadia likes Lupin Labs and has advised to investors too look at it at this point. “Lupin has given consistent returns over the last three months and also over a one-year period,” he said. “However, in the last one month, the fall in the stock price was in line with the Sensex. But overall, the returns in the last three months and the last 12 months were far better than the Sensex,” he added.

The company, Kapadia said, has got a strong presence in the domestic market as well as the US and the Japanese market. “The US is its largest market. About 50% of the global pharma market is in the US, and Japan is the second largest market after the US. So, the company has a strong presence in all these three regions. The growth rates are much higher than the industry growth rates,” he said.

Kapadia said the company is doing exceedingly well in the domestic market. “They have grown by about 24% during the last quarter, and in the US market they have grown by about 85%, and in the Japanese market the growth rate was 24%. So, these excellent growth rates have taken the topline growth to 41% during the quarter. There was a margin improvement of 200 basis points from 17.1% to 19.1%, and the bottomline grew by about 53% during the quarter,” he said.

The private-sector stocks view:

Devangshu Dutta said, “I would say that the private-sector banking stocks may be weak but certainly nowhere near as weak as the real estate sector. There we see a clear correlation. Every time the rupee hardens, the banking sector tends to make a little bit of a bounceback.” He added, “Today, it has been an unusual day because the banks have, by and large, held on while the rupee has plunged below 50. But, every four sessions or so the rupee tends to harden a little bit, regain about Re 0.40-0.50 and on that day the banks tend to come back.”

How is Punj Lloyd faring?

“I would be looking for an intraday high of about Rs 154 or so in the next couple of days. I’d say the Rs 140 put, which is probably being hit right now, is reasonably good. So, I’d say that you could go long on the stock at about Rs 139, and cover the trade at Rs 152-153,” he said.

Devangshu Dutta Disclosure:
I personally do not hold this stock but have recommended it to clients.

Ranjit Kapadia Disclosure:
I hold the stock and have recommended it to my clients.

Source: Moneycontrol

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DISCLAIMER: The author is not a registered stockbroker nor a registered advisor and does not give investment advice. His comments are an expression of opinion only and should not be construed in any manner whatsoever as recommendations to buy or sell a stock, option, future, bond, commodity, index or any other financial instrument at any time. While he believes his statements to be true, they always depend on the reliability of his own credible sources. The author recommends that you consult with a qualified investment advisor, one licensed by appropriate regulatory agencies in your legal jurisdiction, before making any investment decisions, and that you confirm the facts on your own before making important investment commitments.