Analysts' picks: Merck
LKP Shares has recommended a ‘buy’ rating on Merck on account of factors like the company is trading at book value and has a dividend yield of more than 7%.
Merck
cmp: Rs 290
target price: 400
LKP Shares has recommended a ���buy��� rating on Merck on account of factors like the company is trading at book value and has a dividend yield of more than 7%. The broking house has set a one-year price target of Rs 400 for the MNC drug major. According to the outfit, bulk actives like Vitamin E, Oxynex and Guaiazulene account for 20% of the company���s revenues. ���With the company increasing capacities of Oxynex by seven times, the next fiscal should see significant export volumes,��� it adds. The report also highlights the fact that Merck is a debt-free company and has Rs 3,300 million invested in bank deposits and liquid funds, which generates a post-tax return of Rs 200 million annually. ���This surplus cash, which is Rs 200 per share in our opinion, could find its way into a share buyback going forward as brand acquisitions are difficult to come by since the past couple of years,��� adds the report. Merck, with a single manufacturing facility at Goa, out-sources close to 70% of its pharmaceutical business from contract manufacturers and during the first nine months of the current fiscal its revenues grew 26% at Rs 2,962 million.
cmp: Rs 290
target price: 400
LKP Shares has recommended a ���buy��� rating on Merck on account of factors like the company is trading at book value and has a dividend yield of more than 7%. The broking house has set a one-year price target of Rs 400 for the MNC drug major. According to the outfit, bulk actives like Vitamin E, Oxynex and Guaiazulene account for 20% of the company���s revenues. ���With the company increasing capacities of Oxynex by seven times, the next fiscal should see significant export volumes,��� it adds. The report also highlights the fact that Merck is a debt-free company and has Rs 3,300 million invested in bank deposits and liquid funds, which generates a post-tax return of Rs 200 million annually. ���This surplus cash, which is Rs 200 per share in our opinion, could find its way into a share buyback going forward as brand acquisitions are difficult to come by since the past couple of years,��� adds the report. Merck, with a single manufacturing facility at Goa, out-sources close to 70% of its pharmaceutical business from contract manufacturers and during the first nine months of the current fiscal its revenues grew 26% at Rs 2,962 million.
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