The Hindu Business Line : Boehringer deal boosts Cadila

CADILA Healthcare stock is drawing attention of investors following its announcement on February 13 that it has entered into a long-term strategic pact with Boehringer Ingleheim.

It today closed at Rs 436.25 (Rs 429.25), after creating an all-time high of Rs 450, with a volume of 1.17 lakh shares on the BSE. On the NSE, it recorded a volume of 2.44 lakh shares.

Of the traded shares 44.28 per cent was presented for delivery. On last Friday, the counter saw a sharp jump in the traded quantity. But in terms of price, the stock has been rising since February 5. On a closing level basis, it appreciated by over 19.45 per cent.

According to Mr Ketan Thacker of Anagram Stockbroking, at today's closing price the stock traded at 24.7 times its trailing four quarter earnings per share.

The deal with Boehringer renewed the arrangement by which Cadila manufactures and markets former's three products for another 10 years. These products are brand leaders in gastrointestinal and cardiovascular segments.

In October last, Cadila had signed a marketing, tech transfer and manufacturing agreement with another German pharma major, Schering AG for 8 products for the domestic market.

The other recent positive development for the stock is the proposed merger of Banyan Chemicals, a wholly-owned subsidiary, with itself.

The Pankaj Ramanbhai Patel and Zydus family trust controlled company, according to industry sources, is likely to see substantial growth in top and bottomline in the next few quarters. "The market has just begun to put premium for the future growth in the stock," a NSE broker felt.