Wockhardt rallies over 3%, hits 52-week high on merger plans

MUMBAI: Wockhardt rallied as much as 3.3 per cent in trade on Wednesday to hit its fresh 52-week high of 871.40, after the drug maker said that it plans to merge two wholly owned subsidiaries with itself as part of a new business realignment.

The company said in a statement to the stock exchanges on Tuesday that it will consider and approve amalgamation of two wholly owned subsidiaries viz Wockhardt Biopharm and Vinton Healthcare with Wockhardt.

At 09:40 a.m.; Wockhardt was trading 1.7 per cent higher at Rs 858. It hit a low of Rs 841.80 and a 52-week high of Rs 871.40 in trade today.

According to analysts, delivery-based buying is seen in the counter on expectations of improvement in earnings.

"The market is playing back on the recovery and turnaround kind of story. Once the FDA-related problems are over, hopefully the company will get back on track. There have been some reports that possibly some strategic investors would also get in into company," said Avinnash Gorakshakar, Head of Research, Miintdirect.com.

"So combination of this and hopefully after a couple of quarters if we do see some traction on the core earnings that definitely means that there could be good amount of rerating," Gorakshakar added.

Mitesh Thacker, Technical Analyst, miteshthacker.com is of the view that Wockhardt has shown a breakout and it can go up to Rs 905 levels.