TATA CONSULTANCY SERVICES
Reco price/date: Rs 1,243/ Dec 17;
Current/Target price: Rs 1,210 /Rs 1,325
Key takeaways from Tata Consultancy Services (TCS)’ analyst meet this year has been largely in-line with their earlier expectations. Margin pressures expected to continue, though the management indicated continued focus on 27 per cent margins over the medium-term. In analysts’ view the recent underperformance (down 11 per cent in 1 month versus Nifty) on the back of weak outlook is overdone and reasonable valuations (at 16 times FY14 estimated earnings) should help drive a near term relief rally. Maintain Hold.
Religare Institutional Research
SUN PHARMACEUTICAL
Reco price/date: Rs 719/Dec 18;
Current/Target price: Rs 736/NA
Sun Pharmaceuticals’ US subsidiary, Caraco Pharmaceutical Laboratories, has agreed to buy the generic business of URL Pharma Inc. The valuation of the transaction was not disclosed. Net sales for Colcrys in CY2011 was more than $430 million. Upon completion of the purchase, the generic assets of URL Pharma will be owned and managed by Caraco. The deal is unlikely to put pressure on the balance sheet of the company as the deal is non-Colcrys and, hence, the deal size should be less. The net profit should be augmented by 2.3 per cent, as per rough estimate. Maintain Neutral.
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