Shilpa Medicare Ltd Initiating Coverage Report By Karvy

At the current market price of Rs. 946, the company is traded at 22x FY17E EPS of Rs. 43. The company is at the early stages of foraying into the next phase of growth. The valuations have factored in the growth prospects fairly including formulations, US-API, ARV supplies and expanded custom synthesis. We are initiating the coverage on SLPA with a HOLD rating valuing it at average last 6 quarter PE of 25x (when the opportunities were in the visible range for the investors) for a target price of Rs.1,065 representing an upside of 12.6% from the CMP.

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