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Dishman Pharma an outperformer: Karvy

Posted on: May 28th, 2009 and is filed under Brokerage Recommendations.

Karvy Stock Broking has downgraded its rating on Dishman Pharmaceuticals & Chemicals from buy to an outperformer with a target price of Rs 220 in its May 28,2009 research report.

“The management has given the guidance of 15% to 20% growth for FY10E in terms of both top-line and bottom-line and 25% EBITDA margins for next two years mainly because of high margin product mix. We are marginally increasing our net revenue estimates by 2.87% in FY10E to Rs.12271.8 million and by 5.05% in FY11E to Rs 14097.2 million on account of addition of new contracts expected from key clients like Solvay and Astrazeneca and improvement in Solvay Vitamin D & Chemicals business.”

“We are revising our diluted earnings estimates upwards by 21.2% in FY10 to Rs.20 and by 22.5% in FY11 to Rs.23.4 on account of incremental margins, lower interest charges and lower tax rates only for FY10E. We are roll over the price target on FY11E basis and maintain our PE multiple at 9.4x. We are downgrading the stock from “BUY” to “Outperformer” due to recent upsurge in the stock price. We rate the stock as an ‘Outperformer’ with the price target of Rs 220 based on 9.4x FY11E diluted EPS at Rs.23.4,” says Karvy Stock Broking’s research report.

source: Moneycontrol

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