Nomura upgrades Ranbaxy Labs to 'buy', shares gain

Notes positive catalysts like FDA approval for Diovan, improvement in base business margins

Shares in Ranbaxy Laboratories gained after Nomura upgraded the stock to "buy" from "neutral" and raised its target price to Rs 475 rupees from Rs 415.

Nomura cited recent underperformance and a positive take away from management interaction as reasons for the upgrade.

"The organisational restructuring has brought greater clarity and there is strong commitment towards improvement in margins, in our assessment," Nomura said in a note.

The research house noted positive catalysts include FDA approval for Diovan and other key products as well as improvement in base business margins.

Ranbaxy shares up 2.1% percent at Rs 411.60.