This Smallcap Stock Below Rs 50 Is Recommended To Buy With 40% Potential Upside Ahead; PL Sets Rs 65 TP

Pharma company in the smallcap basket, Morepen Laboratories witnessed robust buying sentiment on December 15 as much as the stock price has zoomed by more than 8% in the trading session. The upside also comes after when Prabhudas Lilladher analyst recommended buying or accumulating Morepen shares for a target price of Rs 65. This would be a potential upside of 40% as the stock is currently below the Rs 50 mark.

On BSE, Morepen shares ended at Rs 46.43 apiece, up by 6.20% with an m-cap of Rs 2,373.36 crore. Overall, on Friday, the stock had rallied by 8.30% by hitting an intraday high of Rs 47.35 apiece, which is near its 52-week high of Rs 48.40 apiece.

In six months, the stock has rallied by more than 59% on the BSE.

In a note, Shiju Koothupalakkal - Technical Research Analyst, Prabhudas Lilladher said, "MOREPEN LAB after the short correction has bottomed out near 42 levels and currently has picked up momentum. It has also maintained good support near 40 levels and has been consolidating for quite some time with gradual improvement in the bias, and we anticipate further upside movement in the coming days."

Further, the analyst said, the RSI is also indicating a trend reversal and showing strength for further upside moves, adding, "We suggest buying and accumulating this stock for an upside target of 65 while keeping the stop loss of 40."

This would be nearly 40% upside from the current price level.

The upside in Morepen is despite key changes in its senior management personnel. Last month, Morepen's General Manager - HR, Rolli Saxena, being a functional head and Senior Management Personnel resigned on November 30th. On this same day, Shantanu Tuli, Vice President of sales & Marketing was elevated as 'President -Strategy and Brand Identity with effect from December 1, 2023.

Morepen recorded strong growth in its half-year performance for FY24. In H1, the company's revenue jumped by 17% YoY to Rs 828.46 crore, while PAT climbed by a huge 67% YoY to Rs 35.89 crore.

Meanwhile, its quarterly highlights for the period ending September 30, 2023, were:

- Business is on the fast growth with a quarterly revenue of Rs 425 cr. up 5% in Q2 and 17% on H1.

- Domestic revenue at Rs. 280.10 Cr. is up by 26% and 31% for Q2'FY24 and H1'FY24 respectively.

- In the API Business, exports are up by 14% while domestic business has declined 13% on a QoQ basis.

- Medical Devices business with an astounding 41% jump in this quarter and 44% in H1.

- Domestic Formulation is up 16% in Q2, and 12% in H1.

- EBITDA at at Rs. 36.83 Cr is up 24% for Q2 and 44% up for H1.

- Profit before Tax at Rs. 28.68 Crs. is up 29% in Q2 and 61% in H1.

- PAT at Rs. 21.26 Cr. is up 34% in the Quarter and 67% in H1.

Founded in 1984, the company's extensive R&D facilities and factories are manned by a dedicated team of professionals who ensure stringent quality standards. With a strong global presence, Morepen exports to over 75 countries with certifications from all major regulatory authorities like USFDA, WHO GMP, and EU GMP.

Disclaimer: The recommendations made above are by market analysts and are not advised by either the author nor Greynium Information Technologies. The author, nor the brokerage firm nor Greynium would be liable for any losses caused as a result of decisions based on this write-up. Goodreturns.in advises users to consult with certified experts before making any investment decision.