According to ICICI Direct, Buy Cipla in the range of Rs 645.00–667.00 for target price of Rs 750.00 with a stop loss of Rs 595.00. Time Frame: Six months.
ICICI Direct's research report on Gladiator Stocks
Technical View
The stock has generated a resolute breakout above the long term supply line joining the highs of CY 2015 ( Rs752) CY 2018 (Rs678) currently at Rs 610 levels signalling reversal of the long term corrective trend and a structural turnaround. Going ahead we expect the stock to outperform in the pharma space thus offering fresh entry opportunity, Structurally it has witnessed a faster retracement of the last 18 months decline from Rs 678 to 356 in just four months. A faster retracement in less than half the time interval signals a robust price structure, Based on the above technical observations we expect the stock to head towards Rs 750 levels being the price parity with previous up move Rs 565 to 692 as projected from recent low of Rs 621 signalling upside towards Rs 750 levels in coming months
Fundamental View
Formed by Dr KA Hamied way back in 1935, Cipla is one of the oldest ventures set up by an Indian in the pre-independence era. With 46 manufacturing facilities spread across the world, Cipla has a gamut of therapeutic offerings ranging from simple anti-infectives to complex oncology products. The product basket includes ~1500+ products encompassing almost all therapies and over 50 dosage forms. Formulation exports comprise ~54% of FY20 revenues. The company is focusing on front-end model, especially for the US, along with a gradual shift from loss making HIV and other tenders to more lucrative respiratory and other opportunities in the US and EU. We expect export formulation sales to grow at 10.9% CAGR to Rs 11377 crore in FY20-22E. Key drivers will be a launch of inhalers (drug-device) and other products in developed markets
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