Daljeet Kohli of IndiaNivesh is obviously buoyed by the success of his earlier two stock picks, Alembic Pharma & J. B. Chem. Both stocks have given hefty returns and are still looking good for more gains. His latest stock pick, Cadila Healthcare, has been an under-performer so far. However, a re-rating is on the cards for Cadila and there will be a 20% gain, says Daljeet confidently
Daljeet Kohli’s stock picks of 2014 had Cadila Pharma prominently featured there. It also plays a part in the Model Portfolio 2014. Now, he has released a detailed research report in which the merits of the stock is discussed. Daljeet says that considering expansion in EBITDA margins, visibility in US pipeline and launches, bottoming out of domestic market growth and improvement in return ratios, a re-rating of the stock to its previous level of 18-20x of forward P/E multiple is expected. Cadila is valued at 17x of FY16E and the target price is upgraded to Rs 1,044 (earlier target price was Rs 913). He has recommended a strong BUY, with ~20% upside potential from current level.
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