Buy Cipla, target Rs 570: HSBC

HSBC maintains a buy rating on Cipla with a 12-month target price of Rs 570. The global brokerage firm sees margin levers in cost optimisation in the near term and the possibility of scaling up operations in the US over long term.

HSBC believes that filing rate is likely to step up as R&D increases to match peers. UK gAdvair MDI substitutable approval is still an interesting catalyst. The ongoing business restructuring is likely to release costs, and provide benefits in the near-term.

HSBC expects earnings led recovery largely in the second half of FY17.