Thursday, September 24, 2009

[Investors Please Listen] Cipla has completed a QIP of around Rs 670 cr. Impact positive on the company


 

Though this QIPO will result in dilution in earnings to the extent of 3-4% we believe the net impact will be positive for the company as it can generate better returns from the incremental capex. The company has plans of capex of around Rs 500-600 cr per annum. Company expects to generate ROA of 1.5-1.8 times thus it can improve its return ratios. Cipla has debt of around Rs 900 cr at the end of FY09 Pre dilution our EPS estimates for Cipla are Rs 12.9 for FY10 & Rs 15.2 for FY11. At the CMP the stock is trading at 17x FY11 EPS.


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Safe Harbor:

The information contained and provided on this Website provides Investment advice for the education of investors. The posts are an information service only. Recommendations, opinions or suggestions are given with the understanding that readers acting on this information assume all risks involved. We do not assume any responsibility or liability resulting from the use of such information, judgment and opinions for Trading or Investment purposes.
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