VT Case Study: Ranbaxy Laboratories Ltd.

Ranbaxy Laboratories Limited (Ranbaxy), India's largest pharmaceutical company, is an integrated, research based, international pharmaceutical company, producing a wide range of quality, affordable generic medicines, trusted by healthcare professionals and patients across geographies. Ranbaxy present in 23 of the top 25 pharmaceutical markets of the world. The Company has a global footprint in 43 countries, world-class manufacturing facilities in 8 countries and serves customers in over 125 countries.

On 25^th April, many brokers and financial analysts recommended to buy shares of Ranbaxy and hold the long position. However, VantageTrade gave uptrend signal on this stock on 30th March, almost one month before brokers, at the price of 455.05 and it signaled the down movement on 25th April, the date when brokers advised to buy Ranbaxy shares. The price of the stock at this time equaled to 515.25. The company presented its’ quarterly earnings on 9^th May. The company was expected to post a strong set of numbers, with sales of Rs. 5,000cr, mainly on the back of Lipitor, which would aid the company's OPM to expand to 38.8% yoy in 1QCY2012. The company's net profit for the quarter was expected to come in at Rs. 1,470cr. Ranbaxy labs were below the street expectations. For the quarter, the company reported Net sales and adj. net profits of Rs.3694.5cr and Rs.1246.4cr. After the results shares of Ranbaxy dropped from 510.95 on 9^th May to 479.6 on 11^th May.

Summarizing, if you traded according to VantageTrade recommendations you were able to earn Rs. 60.2 on each share you bought. But if you traded according to brokers’ recommendations you would lose Rs. 35.65 on each stock assuming you bought it on 25^th April and you didn’t sell it till 9^th May.

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