Cipla Ltd - Ventura

With a slew of new product launches, improved MR productivity and regained management focus, we expect Cipla to post strong growth in the domestic market, despite its higher base. Further, with robust product pipeline in inhaler space on the unveil, Cipla's exports are all set to get a major boost. In addition, the ramp up of volumes at the Indore SEZ would lead to better return ratios and margin growth improving profitability.

Given the strong business model in place and growth drivers in form of inhalers and production ramp up at Indore SEZ we expect sales and earnings to grow at a CAGR of 18.2% & 24.0% to Rs.9813.0 crore and Rs.1760.6 crore respectively. At the CMP of Rs.380, Cipla is trading at 21.8x and 17.3x, its earnings and we recommend a BUY with a target price of Rs.417 (target 19.0x FY14 P/E).

Source : Equity Bulls

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