Claris Lifesciences hit a life time high today at Rs.430.10, which was also its 20% UC, which it breached briefly. Volumes have jumped up over 7 times.

The stock has hit a high on news that the company has sold off its injectable business to an American healthcare company, Baxter International Inc. This was sold off for a total gross consideration of $625 million.

Claris has stated this it would take around 12 months to complete this sale and plans to repatriate a significant portion of the money received to the shareholders.

On 9^th December itself in our Market Whispers column we had given a buy call. Our Editor, Mr.SP Tulsian had said, “Claris Lifesciences, one of the largest injectable companies in India, has posted excellent set of earnings for Q2FY17, with OP rising to Rs. 44 cr. from Rs. 33 cr. QoQ and Rs. 9 cr. YoY, showing stellar growth of 33% QoQ and almost five fold jump on YoY basis, led by steady income of Rs. 193 cr. and OPM expansion of 610 bps to 22.7% from 16.6% QoQ. PAT has risen to Rs. 32 cr. from Rs. 22 cr. QoQ and Rs. 14 cr. YoY, yielding an EPS of Rs. 6 for Q2 and Rs. 10 for H1FY17, which was at Rs. 5.73 in H1FY16. We gave buy calls at Rs. 228 in IS section on 16-09-16 and Rs. 251 in MW on 18-11-16 with targets having met. As stated earlier, company is seen as an ideal buyout candidate as recent M&A deals in injectables space having valued the business at 5.3x of revenue or over 15x of EBITDA, while Claris is ruling at 2.2x of sales and sub 10x of EBITDA. Going ahead, company is expecting Iron Scruose and Diprivan (Propofol) approval in 2017, which will be big positive. Management has guided for 30% annual growth over the next three years in the US and has taken services of top global regulatory consultants to avoid USFDA concerns, potential deficiencies are identified well in advance. Share ruling at Rs. 305 is still trading at PE multiple of below 15x on current years’ earnings with institutional holding of over 27% and can move to Rs. 350 in next three months and Rs. 400 in next 1 year. Buy as an investor.”

And it has more than breached our target of Rs.400 in a week’s time!