Kiran Mazumdar Shaw, the chairman and managing director of Biocon got herself embroiled in a twitter exchange with analysts, media and investors after she questioned CLSA's sell call on the stock, slamming the brokerage for its poor understanding of the company's biosimilar potential. She was reacting to the fall in the stock price on Wednesday after the sell call. Prior to the fall the stock had been on an upward trend reaching an 18-month high. Incidentally in the same tweet she also mentioned a buy call from Axis.
While some participants agreed with Shaw and highlighted the changing investment calls by research firms, others felt that the CMD of Biocon should not comment on recommendations of brokerages and focus on the business instead.
Shaw repeatedly criticised the analysts in the exchange saying they did not understand the business model of Biocon and questioned the methodology by which Biocon's shares were valued.
The arguments from the pro Shaw comments and those against were buttressed by quotes from Warren Buffet to the need for respecting independent views.
While Shaw did not endear herself to the analyst community by damning the CLSA report, what is interesting is that there is no consensus among the research community which is split down the middle on the outlook for the stock. Of the 24 analysts tracking the stock, 40 per cent have a favourable opinion while a similar number have a sell. The rest are neutral. The mixed view on the stock is largely because the biosimilar potential while being outsized is at least a couple of years away and analysts feel that there are no significant triggers in the near term.