Stock Views on Varun Shipping, Biocon, Cadila Healthcare, Great Offshore

Karvy on Varun Shipping - Target of Rs 61

Karvy Stock Broking has maintained its buy rating on Varun Shipping Company with a target price of Rs 61 in its research report.

"The timely exit from drybulk segment in FY08 where freight rates have fallen by 85% since May 2008 and entry into promising deepwater support servicessegment by acquiring high end anchor handling tugs (AHTS) are expected to help the company to grow operating profits in current turbulent time in shipping. The Company has significantly reduced cyclicality associated with the shipping industry with selection of low risk assets and building diversified fleet across three segments viz. the Liquefied Petroleum Gas i.e. LPG, crude and offshore."

"We expect consolidated revenue to increase by 2.2% to Rs 9.69 billion in FY10 and by 12.4% to Rs 10.9 billion in FY11 and net profit to decline by 10.7% to Rs 1.25 billion in FY10 and increase by 42.2% to Rs 1.77 billion in FY11. We maintain our valuation at 30% discount to NAV with target price of Rs 61 and maintain Buy rating," says Karvy Stock Broking's research report.

IIFL on Biocon - Target of Rs 181

IIFL has maintained its buy rating on Biocon with a price target to Rs 181 in its research report.

"Our recent meeting with Biocon’s management persuades us that the company is stable and growing, notwithstanding the large forex losses that it suffered in FY09 and those that we believe it will continue to suffer to a lower extent for 3-5 years. The biosimilar insulin opportunity in the regulated markets could provide significant upside over the next 3-4 years. The company plans to launch biosimilar insulin in Europe in 1HCY11 and its big pharma partner is making headway towards a launch in the US. Earnings in 4QFY09 will again likely be weighed down by a large forex item, but such losses would be significantly lower thereafter. The stock’s current valuation a PE of 9x on core FY10ii earnings is attractive, in our view. We maintain BUY and raise our price target to Rs 181," says IIFL's research report.

Sharekhan on Cadila Healthcare - Target of Rs 372

Sharekhan has maintained its buy rating on Cadila Healthcare with a price target of Rs 372 in its research report.

"Zydus Cadila (Zydus) has signed a new collaborative drug discovery and development deal with US-based Eli Lilly to develop drugs focusing on the area of cardiovascular diseases. As per its earlier deals with Piramal Healthcare, Jubilant Organosys and Suven Life sciences, Eli Lilly has adopted a similar approach and will pay Zydus for finding new drug candidates and taking them to mid-stage trials, at which point Eli Lilly will have the option to step in and licence the most promising therapies."

"We maintain our positive stance on Zydus, given the strong traction across its business segments. The strong traction in the domestic and the US businesses, and the increasing visibility of the business from the Hospira joint venture reinforce our view on Zydus’ continued growth prospects. We reiterate our Buy recommendation on Zydus with a price target of Rs 372," says Sharekhan's research report.