Buy Ranbaxy Laboratories, target of Rs 603: Angel

Angel Broking has maintained its buy rating on Ranbaxy Laboratories with a target price of Rs 603 in its April 22, 2008 research report. "For 1QCY2008, Ranbaxy posted Net Sales of USD 409 million registering a yoy growth of 15%. However, on the back of Rupee appreciation, Sales grew 3.9%. Sales growth during the period was mainly driven by the Developed markets, which registered growth of 17% (in dollar terms) and contributed around 40% of overall sales."

"At the CMP, the stock is trading at 26.8x CY2008E and 19.6x CY2009E Earnings. Ranbaxy remains our preferred pick in the Pharmaceutical space on account of its diversified Business Model. In the US, where the competitive pressures are intense, the company has a diversified presence having a good mix of Plain vanilla and niche opportunities. Further, with the second largest product pipeline for the US, we believe Ranbaxy is well placed to take advantage of the emerging opportunities. Further, the recent alliances done by the company in the area of Biotechnology bodes well for it in the long run. We maintain a Buy on the stock, with a Target Price of Rs 603," says Angel's research report.

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