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Nomura Maintains Sell on Cipla
Nomura says that at the current run-rate of profit (Euro 28 million in 1H15), the deal to acquire Kremers Urban is valued at 21 times price to earnings. At the current profitability, the deal will be marginally earnings accretive, in our view. Although we see some strategic rationale for Cipla to buy Kremers Urban, but given its high dependence on one product, we reckon the valuation as mentioned in the article is not cheap.