1 Large Cap Pharma Stock To Buy After Better Q3 Results: ICICI Direct

After a breather on January 25, Nifty is again in for a shakeout today (January 27, 2022) after the US Fed in its just concluded FOMC meeting signaled to hike rates in March itself to curb the rising inflation. Nifty at around 9:25 am was down by 244 points at 17033, while the Sensex tumbled by 830 points to 57,028. Meanwhile, broader markets as well as the Bank Nifty traded with a cut of over 1 percent.

Amid weak market sentiment after better than expected Q3 earnings, ICICI Direct gives 'Buy' call on two pharma companies for gains up to in 12 months.

1. Cipla: Buy for a target of Rs. 1100

Stock	Target price	Current price	Potential gains in 1 year
Cipla	1100	920	19.56%

Company performance:

Quarterly numbers remained steady and came in better than the brokerage estimates. Sales inched higher by 6% YoY, with EBITDA remaining steady for the period at Rs. 1231 crore. Hence, PAT was down by close to 3% YoY at Rs. 728.6 crore.

ICICI Direct’s take on Cipla:

The brokerage retains its 'Buy' call on the stock considering the pharma major's strength of putting its prime focus on core therapies. "The company values Cipla at Rs. 1100 i.e. 24x P/E on FY24E EPS of Rs. 44.6 + Rs. 31 NPV for gRevlimid", notes the brokerage. Further as per the brokerage there is expected marked momentum from H2Fy23 in the US given the peptide portfolio unlocking and probable approvals as well as product launches of gRevlimid, gAdvair and gAbraxane besides gains from Albuterol portfolio

About Cipla:

The large cap pharma major has a strong product pipeline in 65 therapeutic segments. The company is a global player exporting its branded as well as generic formulations to more than 170 nations. The company enjoys leadership in segments including respiratory, anti-infective, cardiac, gynaecology & gastro-intestinal.

Alternate large cap pharma on which ICICI Direct is bullish:

Stock	Target price	Current price	Potential gains in 1 year
Sun Pharma	965	797.1	21%

"Higher contribution from specialty and strong domestic franchise is likely to change the product mix towards more remunerative businesses by FY23", notes the brokerage.

Disclaimer

The above stock was picked from the brokerage report of ICICI Direct. Investing in equities poses a risk of financial losses. Investors must therefore exercise due caution. Greynium Information Technologies, the author, and the brokerage house are not liable for any losses caused as a result of decisions based on the article.

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