Angel Broking: 'Buy' Ranbaxy

Angel Broking has given a 'Buy' recommendation for Ranbaxy with a 12-month price target of Rs 440.

For Q2CY2007, Ranbaxy posted a 19.7% jump in bottomline to Rs 121 crore backed by an 8.8% revenue growth to Rs 1,446 crore. The company's OPM expanded to 18.3% due to continued reduction in costs and higher productivity.

At the current market price, the stock is trading at 21.7x  CY06E and 18.4x CY07E (excluding in-organic growth initiatives) earnings. The recent decline in the stock provides a good risk-reward opportunity for investors.