NEW DELHI: Shares of Natco Pharma jumped 10 per cent in Thursday's trade, as the approval to a generic version of Copaxone by USFDA to the drugmaker's marketing partner Mylan, led to rating upgrade by brokerages.

The stock rose 10 per cent to hit a high of Rs 1,049.75. This was the fifth day of consecutive gains for the stock. The stock had rallied 20 per cent on Wednesday.

Brokerage Nirmal Bang Securities said that the approval will give Natco a strong foundation for base earnings over the next four to five years after which generic opportunity from Revlimid will kick in and help build over the base.

"In the near term, the extraordinary cash flow on account of limited competition nature of the opportunity will strengthen its balance sheet for executing growth plan on a rising earning base. We see the risk-reward profile as positive. Mylan has announced that they might get 180 days exclusivity. However if the same is not granted, the launch timeline can get delayed up to FY19. We have revised our target price to Rs 1,102 from Rs940 earlier, rolling over our target EPS from March FY19 to September FY19," the brokerage said.

The brokerage has upgraded its rating on the stock to 'Buy' from 'Accumulate'.

"The 25 per cent correction which we have seen in the stock over the past two-three months may get reversed with this particular announcement. Limited competition products is the business strategy for almost every pharma company and they all talk the same language. There is intense competition and now they want to move up the value chain. But it is easier said than done. Spikes which may take place in stocks including Natco may be good opportunities for investors to lighten up their positions," Dipan Mehta, Member, BSE & NSE said.