Ranbaxy a good buy opportunity: Deven Choksey

In a chat with ET Now, Deven Choksey, MD, KR Choksey Securities, talks about Ranbaxy.

In the near term how much more downside are you factoring in for Ranbaxy?

If you look at the entire Lipitor kind of revenue and the profit debt if you count into Ranbaxy’s book, it would translate in FY11-12 probably you would find that it would translate to around Rs 30-31 per share out of total earnings of Ranbaxy of around Rs 50-51 per share. That means the balance part of the business of Ranbaxy would generate an earning of over Rs 20 per share. If you calculate that 20 times fee which large cap pharma companies would normally command, the price should be around 400 levels. Along with that, Lipitor if you count it, today the price is around 440 levels. So actually speaking, it is 10% for Lipitor. That is what is being quoted right now into the market. If Lipitor case which Mylan has filed along with Pfizer, they are working together. If they have filed against Ranbaxy and if Ranbaxy ends up winning this case, my reading says that the stock would have a tendency to jump up. So maybe 10% fall from here, it would be a good buy opportunity to get into Ranbaxy.