Vishal Manchanda, pharma analyst at Nirmal Bang Institutional Equities Research on Tuesday picked two pharma stocks, Sun Pharmaceutical Industries Ltd and Natco Pharma, as the top picks for 2020.
Manchanda said the house has a buy with a target price of Rs 180 for Dishman Carbogen Amcis, after Income Tax Department conducted a day-long 'search and survey operation' at the company's properties.
He said, "I don’t think there is any problem that is visible to us that would justify the current valuations. The stock needs to be much higher than where it is today."
"Investors are looking for comfort from the management to clarify the issues. Basically, this IT raid, whenever it comes to a closure they are waiting for comfort from the management to come in and that is where the stock can go up from here. So from a valuation perspective, we do not have to look at it because there is no doubt about it that the valuations are ridiculous now,” he added.
According to Manchanda, management has to provide some comfort to the investors by doing an investor call and the house and investors are also waiting for it.
"Dishman is an extraordinary company when it comes to contract research and manufacturing services (CRAMS) segment. They are a very large player not only in India but globally. After Divis Lab in India, Dishman would be the second-largest CRAMS player and the company has a pipeline of phase-3 products which is potentially very big and can help them continue to scale up their CRAMS business for the next 3-5 years,” Manchanda added.