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Deeptha Rajkumar

INDIAN `large to small' mid-cap pharma companies are having a good run on the bourses. One such beneficiary would appear to be the stock of Wockhardt Ltd.

Touted as a "good medium story", the stock is regaining lost ground on the bourses on the back of discovery in valuations.

Brokers believe that the stock has not lost steam and should appreciate from its current levels. They were, however, unwilling to peg an outer limit to the price.

According to Mr Srikant Shetty of Karvy Stock Broking, ever since its June quarter results, the stock has recovered to its former levels. "We are looking at better numbers going ahead. And at these levels, the stock is reasonably valued," he said.

Said analyst Mr Sameer Narayan of Enam Securities, "The company is looking to ramp up its initiatives in the formulation export segment. Its domestic formulation business has also recovered, post the FMRAI strike. The recent launch of human insulin in the domestic market places it on a firm footing in the biotech market. Additionally, its recent acquisition of CK Pharma, which will serve as a vehicle for growth in the UK and Europe, will add to its critical mass. All this put together has led to discovery and more visibility on earnings." Analysts believe that these initiatives taken by the company will sustain earnings momentum for two years. The key drivers being the company's US generics business and the low-margin biotech exports to the unregulated markets.

Yet sceptics opine that in a liquidity-driven rally, it is largely an illiquid stock. "There is low institutional interest in the counter. Whatever activity one does witness is because of UTI and LIC. While there is no denying that the company has gained a lost of visibility due to aggressive marketing of its human insulin, conviction levels are not all that strong," market sources said.

The stock ended the day at Rs 501.35, up 1.68 per cent with around 11,529 shares traded on the BSE. On the NSE, it closed at Rs 500, up by 2.99 per cent with around 87,706 shares traded.

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