Cipla plunged to a 52-week low of Rs 791 on Wednesday after a prolonged bout of losses on the bourses.

As of now, it is still lower by 0.88% at Rs 794 on BSE. Volumes were seemingly thin at just 5,770 shares on BSE.

The stock has been on a sustained decline amid intermittent rallies. It has lost 15.8% to its current level from Rs 943.10 on 9 January 2003 .

A leading local institutional investor is known to be selling in the stock of late. A section of the market feels that, having witnessed a sharp fall, the stock offers good opportunity at the current level . The scrip trades at a PE multiple of 17.8 based on its nine month (April-December 2002) annualised EPS of Rs 44.60.

After a setback received by Cipla from a US court ruling, last year, that its American alliance partner Andrx Pharmaceutical's version of blockbuster ulcer drug, Prilosec (Andrx has a tie-up with Cipla for supplying Omeprazole) was patent infringing, exports of its anti-asthma inhaler were seen as the key trigger for the stock. However, exports of the inhaler have already been much delayed. Italy's Chiesi Farmaceutici seems to have stolen a march on the company, as it recently received an approval for selling budesonide-based inhalers that use ozone-friendly HFA propellants, in Germany. Budesonide is an anti-asthma drug.

In December 2002, the Drug Controller General of India directed the state drug authority of Silvassa to suspend the license for the manufacture of Montair Plus. Montair Plus is a fixed dose combination of montelukast and bambutarol, which was manufactured by Okassa Pharma and marketed by Cipla. The suspension was necessitated as Okassa Pharma had not taken the necessary approval from the Drug Controller General of India for manufacturing and marketing the product. The DCGI has also advised Cipla to withdraw all the stock of the product from the market.

For Q3 ended 31 December 2002, Cipla posted disappointing results. It recorded a mere 6% rise in net profit to Rs 66.46 crore compared to Rs 62.65 crore in the corresponding period of the previous year. Net sales increased by 5% to Rs 387 crore (Rs 3.87 billion) from Rs 366.91 crore (Rs 3.66 billion).

Earlier, Cipla entered into a strategic alliance with California-based Watson Pharmaceuticals Inc., to develop, manufacture and market 10 generic pharmaceutical products, many of which are currently under development. Under the agreement, Watson will have exclusive US marketing rights to all the developed products and will also own the regulatory filings. On approval of the products, Cipla will manufacture and supply products to Watson.

BSE Code: 500087