5 Pharma Stocks To Buy According To The India Strategy Report

Broking firm, Motilal Oswal has come-up with its latest India Strategy report, where it has a buy call on several stocks across sectors. Here are 5 pharma stocks the brokerage highlights as its top picks.

Aurobindo Pharma

0	Current market price	Target price
Aurobindo Pharma	Rs 715	Rs 950

The India Strategy report reveals a near 33% upside possibility on the stock of Aurobindo Pharma. According to Motilal Oswal, it expects Aurobindo Pharma's US sales to decline 13% to $370 million on the divestment of the Natrol business and price erosion in the US.

The firm says to watch out for the for new COO/CEO strategies and focus areas in
API/Injectables space. Also, one needs to keep a watch on the progress on biosimilars and niche product development.

Ajanta Pharma

0	Current market price	Target price
Ajanta Pharma	Rs 2299	Rs 2780

The India Strategy report has a placed a buy call on the stock of Ajanta Pharma with a price target of Rs 2,780. The brokerage has set a price target of nearly 22% higher from the current levels. Motilal Oswal expects DF sales to revive strongly with 16% YoY growth in 2QFY22 for Ajanta Pharma. It expects Asian sales to be subdued, while it sees a 15% YoY growth in US sales for the quarter.

Alkem Labs

0	Current market price	Target price
Alkem Labs	Rs 3954	Rs 4620

Motilal Oswal believes the stock of Alkem Labs can generate a returns of slightly more than 16% from current levels. It expects Alkem's India business (65% of sales) to grow 14% YoY on low base and continued recovery in Acute therapies. The brokerage expects g-Duexis launch to ramp up US sales to $108 million for the quarter.

Gland Pharma

0	Current market price	Target price
Gland Pharma	Rs 3859	Rs 4610

The India Strategy report highlights a near 22% gains on the stock of Gland Pharma and has set a target price of Rs 4610 on the stock. Motilal Oswal expects sales momentum to sustain on growth in ROW markets. According to the brokerage among the key monitorables would be an update on scale-up of second Sputnik V dose and timeline for commencement of shipment.

Jubilant Pharmova

0	Current market price	Target price
Jubilant Pharmova	Rs 632	Rs 720

The brokerage sees an upside of nearly 24% upside on the stock of Jubilant Pharmova. According to the brokerage the company's Life Science Ingredient business demerger makes YoY numbers incomparable (2QFY21 included 3M of LSI sales). Among the key monitorables will be the update on US FDA inspection at Nanjangud and Roorkee, the brokerage has noted.

Markets remain overvalued

While brokerage recommendations have been listed here, we suggest some caution the way the markets have move higher over the last few months. Currently, the markets are trading at significant premiums to long term averages.

Disclaimer

The above 5 stocks to buy are picked from the India Strategy report of Motilal Oswal Financial Services. Please note investing in stocks is subject to market risks and one needs to be cautious at this point of time as markets have gone-up sharply. Neither the author, nor Greynium Information technologies Pvt Ltd would be responsible for losses incurred based on a decision made from this article.