Piramal Healthcare in the pink of health as GSK eyes acquisition

Piramal Healthcare jumped 5.71% to Rs 376 at 12:34 IST on reports UK-based GlaxoSmithKline Plc is looking for potential acquisitions in the Indian market and has shortlisted Piramal Healthcare and Dr Reddy's Lab for the proposed acquisition.
The stock hit a high of Rs 382, which is also its 52-week high. It hit a low of Rs 357 so far during the day. The stock had hit a 52-week low of Rs 163.75 on 19 February 2009.
The mid-cap drug maker has an equity capital of Rs 41.80 crore. Face value per share is Rs 2.
The current price of Rs 376 discounts the company's Q1 June 2009 annualised EPS of Rs 14.18, by a PE multiple of 26.51.
GlaxoSmithKline Plc (GSK), which is looking to expand its presence in emerging markets such as India, has reportedly engaged investment bank Lazard and Co. to evaluate potential acquisitions in the country.
In February 2009, the media had reported that GSK was in talks to buy Piramal for roughly $1.5 billion (Rs 7,230 crore). However, Piramal Healthcare had denied media reports .
A senior official from Piramal Healthcare was quoted by media as saying on Monday, 21 September 2009, that the company keeps receiving proposals from merchant bankers, but that the promoters have not so far looked at those offers seriously. Rather, the company wants to grow through organic as well as inorganic route in the domestic market
Meanwhile, shares of Dr Reddy's Laboratories were up 0.20% at Rs 865 on the BSE.
According to reports, GSK's strategy to consolidate its presence in India is similar to that of its global rivals such as Pfizer Inc., Sanofi Aventis SA, and Daiichi Sankyo Co.
All these firms want to ensure sustained supply of cheap off-patent drugs or generics from India to cater to the global market. At least $70 billion worth of patented drugs will go off patent by 2012.
India's Rs 35,000 crore drug market, which is expanding by 14-15% a year, is another reason for multinationals to look seriously at the country.
Piramal Healthcare's net profit rose 45.5% to Rs 74.11 crore on a 16.5% increase in sales to Rs 569.73 crore in Q1 June 2009 over Q1 June 2008.
Piramal Healthcare is one among the top ten pharmaceutical contract-manufacturing firms in the world. A significant part of Piramal Healthcare's revenue comes from its contract research and manufacturing services (CRAMS), followed by healthcare solutions and diagnostics. Over the past year, it has been on an acquisition spree, buying selected brands of Khandelwal Labs, Minrad International, and recently, RxElite Holdings in the US.