1 Large And 1 Mid Cap Pharma Stocks To Buy As Budget Continues To Promote Healthcare

Indices after three consecutive gains have opened a tad lower with Nifty holding levels above 17,750. Of the various sectoral indices, there is a mixed trend, with pharma, IT, media and financials weak in trade.

Meanwhile, ICICI Direct has recommended 2 pharma stocks for gains in 1-year:

1. Sun Pharma: Buy for a target of Rs. 1075

The company in the December ended quarter posted strong set of numbers in line with brokerage estimates. The good numbers are on the back of strong momentum across business verticals. Sales at the company climbed over 11% YoY to Rs. 9863 crore. Also adjusted PAT was at Rs. 2058.8 crore (up 11.1% YoY).

Brokerage's take on Sun Pharma: The company maintains 'buy' given the consistent traction on the specialty front, linear growth in India formulations besides calibrated approach in generics.

Target Price and Valuation: Valued at Rs. 1075 i.e. 28x P/E on FY24E EPS of Rs. 38.3

2. Ajanta Pharma:Buy for a target of Rs. 2605

The company has posted strong numbers in line with estimates amid strong traction in

India and Africa branded business. Adjusted PAT was at Rs. 191.8 crore, up 8.6% YoY.

ICICI Direct’s take on Ajanta Pharma:

Maintain BUY rating on the stock with focused approach. Target Price and Valuation: Valued at | 2605 i.e. 26x P/E on FY24E EPS of Rs. 100.1

The company is seen to perform good in stock price terms given the focus on launching maximum number of first time launches with focus on new drug delivery system (NDDS)In emerging markets, front-end marketing for direct interaction with doctors alculated focus, healthy margins, return profile and lighter balance sheet are some key differentiators for Ajanta. Also the company's margins are likely to improve amid operational leverage.

Disclaimer:

Investing in equities is risky and investors must therefore understand the risk. The author and Greynium Information Technologies Pvt Ltd would not be responsible for any losses caused based on the article. Investors should exercise caution on account of heightened volatility in the markets currently.

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