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Buy Dishman Pharma; target of Rs 213: Emkay Global

Posted on: May 27th, 2009 and is filed under Brokerage Recommendations.

Emkay Global Financial Services has maintained its buy rating on Dishman Pharmaceuticals & Chemicals with a price target of Rs 213, in its report dated May 26, 2009.

“Amidst weak global outlook and inventory rationalization, Dishman’s FY09 numbers are ahead of our expectations. Revenue grew by 32% to Rs 10.6 billion (est. of Rs 10.4 billion) on the back of a 29% growth in CRAMS business and full year impact of Vitamin-D business. During Q4FY09, the company witnessed an EBIDTA margin expansion of 740bps to 25.2% mainly on the back of reduction in Raw material cost (down by 810 bps) and Employee cost (down by 240bps), The reduction in the raw material cost was primarily on account of higher contribution from Contract research business. Despite strong performance in FY09, management has given 15-20% revenues and earnings growth for FY10E, which is line with our estimates. We maintain our FY10E revenue and earning estimates and introduced FY11E numbers. We reiterate our ‘Buy’ rating with a target price of Rs 213,” says Emkay Global Financial Services’ research report.

source: Moneycontrol

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