Stock Views on Lupin, Max India, Royal Orchid

Karvy Stock Broking on Lupin - Target Rs 1760

Karvy Stock Broking has recommended outperformer rating on Lupin with a target of Rs 1760, in its research report.

“Lupin's branded play began with the launch of Suprax in the US market in February 2004. Since then the company has been able to make Suprax a US$74 mn brand and has been able to expand its franchise with the paedriatic doctors in the US. Over the years the company has been able to build a strong brand franchise for Suprax. Lupin has expanded the lifecycle of the product by creating line extensions. The Suprax basket comprises 100mg, 200 mg suspension and 400 mg tablets. Lupin is now expanding further into the high value Cardiovascular (CVS) and respiratory products market in the US.”

“The stock is currently quoting at 22x FY 2010E and 15.9x FY 2011E. As a result of the upgrade in EPS we upgrade our multiple from 17.4x to 19x FY 2011 and revise our price target upwards by 12.2 % to Rs 1,760 and continue to rate the stock as Outperformer.”

Sharekhan on Max India - target Rs 295:

Sharekhan is bullish on Max India and has recommended buy rating on the stock with a target of Rs 295, in its research report.

“Max India plans to raise around Rs 725 crore collectively through a Rs550 crore fully and compulsorily convertible debentures (FCD) issue and another Rs173.4 crore by way of warrant issue to the promoter. The company has convened an extra-ordinary general meeting on January 22, 2010 to obtain shareholders' approval for the FCD and warrant.”

“We have factored in the above-mentioned capital raising plan into our estimates based on the deployment plan disclosed by the management. We expect the capital infusion in the insurance business to allow optimum utilisation of the aggressively expanded branch network, while in the case of healthcare business the capital infusion gives us comfort in Max India’s ability to reach the target of 1,800 beds by FY2011. We maintain our Buy recommendation and price target (Rs295) on the stock,” says Sharekhan research report.

Nirmal Bang on Royal Orchid - Target of Rs 108

Nirmal Bang is bullish Royal Orchid and has recommended buy rating on the stock with a target of Rs 108, in its research report.

"At current market price Royal Orchid is trading at EV/EBITDA of 12.0x and 8.0x of FY11E and FY12E EBITDA, respectively. We have valued the stock at 9.5x its FY12E EV/EBITDA (which is inline with its historical average and discount to its peer group). We expect ROHL’s EBITDA to grow at a CAGR of 17.35% over FY09-FY12E. We hereby initiate coverage on ROHL Ltd. and recommend buy rating with a target price of Rs 108 (32% upside) in 15 months."