Reuters Market Eye - Shares of Cipla Ltd fall after UBS downgrades the stock to "sell" from "buy" and reduces its target to 370 rupees from 470 rupees citing "weak" earnings outlook despite "premium" valuations.
"Our original expectation of earnings accretion through Medpro acquisition has not played out while SG&A (selling, general and administrative) ramp up has been much stronger than we anticipated," UBS says in its note.
Cipla acquired South Africa's Cipla Medpro for $488 million last year.
UBS adds Cipla's pipeline is "weak", and expects research and development costs to rise by fiscal 2015-16.
(Reporting by Abhishek Vishnoi)
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