Karvy Stock Broking firm has maintained buy rating on Wockhardt with target price of Rs 455 in its February 28, 2008 research report. "The net revenues in Q4CY07 grew by 44.8% y-o-y to Rs7,620 million against our estimates at Rs7,357 million. This is mainly on the back of strong performance witnessed from the export markets (with 60% growth) driven primarily from the formulation exports (with 68.2% growth) from the US & European markets. For CY07, the net sales went up by 53.5% to Rs26.5 billion on back of export revenue growth of 77.8% which has been driven by formulation exports with a 91.8% growth to Rs17,457 million. Wockhardt plans to grow by 32-35 % in CY 2008. We have assumed 33 % growth in CY 2008 and incorporated R & D expenses of Rs 600 million and Rs 500 million in CY 2008 and CY 2009."
"We believe the company is on a strong growth path and would start amortization of R & D expenses which would be reflected in CY 2008E to the tune of Rs 150 million and Rs 400 million in CY 2009E. We have adjusted R & D expenses which have been capitalised to the tune of Rs 700 million in CY 2008 E and Rs 300 million in CY 2009E. Currently the stock is quoting at 12x CY 2007. We maintain our BUY rating on the stock with a price target of Rs 455 based on 12x CY 2008E (EPS Rs37.9)" says karvy research report.
Link to the article: http://www.moneycontrol.com/india/news/recommendations/buy-wockhardt,-target-rs-455:-karvy/328295
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