We recommended Wockhardt Ltd in Sep-12 (Refer : http://atulgandhicom.blogspot.in/2012/09/reborn-with-vigour-vitality-wockhardt.html) Share price appreciated subsequently from Rs 1184 to Rs 2166 in Mar-13.
We saw steep fall in share price in last week, price touching to low of Rs 1066 (Current price Rs 1277). Management has informed “Company has received an 'import alert' from USFDA on one of its manufacturing unit located in Waluj near Aurangabad. The impact of the import alert on the revenues is estimated to be in the range of $100m on an annualised basis. The Company is taking all steps to address the concerns raised by USFDA and shall put all efforts to resolve the issue at the earliest.”
FY2013 company’s sales has grown to Rs 5609 crore from Rs 4351 crore in FY2012, an impressive 29% growth. $100m approximately constitute 10% of company’s FY2013 sale. Impact of ‘import alert’ can lead to sluggish growth in current financial year.
It may take few months to resolve ‘import alert’ issue & thereafter we will see re-rating of stock price. We believe there is potential for appreciation in Wockhardt Ltd stock & recommend to hold / renter.
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