-------- Forwarded Message --------
Subject: Cipla: 490-460 May Be A Very Good Demand Zone--Are US FDA
Issues Are Peaking ?
Date: Wed, 30 Mar 2016 09:42:38 +0530
From: Asis Ghosh <asis...@gmail.com>
Reply-To: asis...@gmail.com
Price & time action on the technical chart suggests that Cipla has very
good support around 490-480-460 zone and sustaining above 495-505, it
mat target 530-555 in the near term.
On the flip side, consecutive closing below 460, it may further fall up
to 405-365 in the worst case scenario.
*Trading Idea: Cipla**
**
**CMP: 503**
**
**Either buy above 495 or in dips around 480-470;**
**
**TGT: 530-555*-582-605*-630-660 (1-3-6 M)**
**
**TSL< 460**
**
**Note: Consecutive closing (3 days) below 460 for any reason, Cipla may
further fall towards 430-415-405*-380-365* in the near to mid term
(alternative bear case scenario from the current trading level).**
*
In the last few months several plants of Indian pharma cos
(DRL/Lupin/Cipla/Sun/Cadila/Natco) has come under US FDA scanner. It
seems that Indian pharma cos are increasingly making themselves as "soft
targets" of US FDA and even drug regulators of other countries, such as
UK are targeting them.
Apart from quality, raw material, GMP, the main issues are involved here
is data integrity and going forward, its highly expected that pharma cos
will get their act together and resolve these recurring issues.
There may also be a political angle to it, specially in the US election
year (from affordable quality drugs, local employment to political
donation). Thus, if Indian pharma cos will able to resolve these US FDA
issues by being more serious about US quality standard and data
integrity, the current US FDA fiasco may be termed as "peaking".
For Cipla (Consolidated):
Current Q3FY16 TTM EPS: 20.99
Projected FWD EPS: 23.00-26.75-30.45 (FY:16-18)
Average PE: 20 (Current PE around 25 against industry average 30)
As par BG metrics & current market scenario:
Present median valuation may be around: 490 (Q3FY16/TTM)
Projected fair valuations might be around: 515-555-590 (FY:16-18/FWD)
SCRIP EPS(TTM) BV(Act) P/E(AVG) Low High
Median 200-DEMA 10-DEMA
CIPLA 20.99 134.19 20 504.83 470.63 487.73
607.08 527.62
CIPLA 23 148.35 20 528.45 492.65 510.55 607.08
CIPLA 26.75 163.95 20 569.90 531.30 550.60 607.08
CIPLA 30.45 181.25 20 608.04 566.85 587.45
607.08 527.62
As par DCF/EV method, current valuation of Cipla may be around 710 and
projected (FY:17) value may be around 850.
EV NET DEBT EV TO EQ NO OF EQ SHARES O/S PROJ.FAIR VALUE
58403.65 1701.76 56701.89 802960440.00 706.16
70084.38 2382.50 67701.88 802960440.00 843.15
Analytical Charts:
--
Thanks & Regards,
Asis Ghosh
--
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