Following Hefty Growth In API sector, Buy This Pharma Stock, With Rs. 1,229 Target Price: Kotak Securities

With A Target Price Of Rs. 1,229, brokerage firm Kotak Securities has recommended investors look forward to the stocks of Ami Organics Ltd (AOL). "We believe pharma API sector has a good traction and thus, AOL is set for newer growth opportunities on account of launch and commercialization of import substitute products, cost efficiencies due to better utilization levels and enhancement of its product offerings," the firm thinks.

Target Price

The Current Market Price (CMP) of Ami Organics Ltd. is Rs. 1,067. Kotak Securities has estimated a Target Price for the stock at Rs. 1,229. Hence this company is expected to give a 15.20% return, in 1 year.

Stock Outlook
Current Market Price (CMP)	Rs. 1,067
Target Price	Rs. 1,229
1 year returns	15.20%

Company performance

Ami Organics Ltd. is a fast-growing and developing company, operating in the pharma sector. AOL's net sales stood at Rs. 3,406 mn, which is expected to grow to Rs. 4,768 mn in FY 22. The company's EBITDA stood at Rs. 801 mn, which is expected to grow to Rs. 1,144 mn. The company's adjusted PAT stood at Rs. 540 mn, which is expected to grow to Rs. 765 mn. Along with the domestic market, it supplies Pharma Intermediates to various multi-national pharmaceutical companies which cater to the large and fast-growing foreign markets.

Comments by Kotak Securities

Maintaining the buy rating, Kotak Securities stated, the company "Is well placed to complement its long-term growth strategy with the support of the experienced team, extensive geographical presence and higher entry barriers in the industry. Over the last 2 years, its API and NCE portfolio has expanded from over 425 products to over 450 products as of March 31, 2021. It has been successful in developing and commercializing these intermediates for APIs across 17 key therapeutic areas since inception."

Additionally, AOL had a strong debut in September 2021, at Rs. 910, listing at a premium of 49% to the issue price.

About the company

Ami Organics Ltd (AOL), established in 2004, is Surat based one of the leading companies focused on the development and manufacturing of different types of Pharma Intermediates, New Chemical Entities (NCE), and Key Starting Material for agrochemicals and fine chemicals. The majority of the company's products cater to API related to Chronic diseases which are high-growth areas. The company has a wide distribution network through which it caters to more than 150 customers (including international customers) directly in India and 25 countries overseas.

(Also read: Sharekhan Given A 'Buy' Rating To This Stock, For A 17.24% Upside)

 

 

Disclaimer

The above stock was picked from the brokerage report of Kotak Securities. Investing in equities poses a risk of financial losses. Investors must therefore exercise due caution. Greynium Information Technologies, the author, and the brokerage house are not liable for any losses caused as a result of decisions based on the article.