InvestorQ : Why did the stock of Cipla rally so sharply on 14 December?
vidhya Laxmi made post

Why did the stock of Cipla rally so sharply on 14 December?

Answer
image
sarah Leo answered.
7 months ago
Follow

There was positive action in Cipla on 14 December and the reasons had to do more with the company getting a favorable legal judgment in one of the patent cases in the US. That is likely to take away the short term uncertainty in the stock performance.

In fact, on Monday Cipla rallied sharply by over 4% and the stock touched a level of 792 before tapering back. It is close to its previous high of Rs.829. Many long term investors have considered the stock undervalued considering its strong domestic franchise and its relatively humble market cap of just about Rs.63,500 crore.

In addition, growth has made the stock a compelling proposition. For Sep-20 quarter, Cipla reported 16.3% revenue growth and 42% bottom line growth. In terms of valuations, Cipla currently trades at a P/E of about 34.48 and P/BV of 2.16. With the patent case getting settled favourably, short term investors are looking at the stock to take out its highs.

0 Views