Nirmal Bang Positive On Midcap Pharma Stock, Recommends Buy, Jumps Over 10% In 1 Week

Nirmal Bang, a renowned brokerage firm, has come up with a positive outlook on Ajanta Pharma Ltd, assigns Buy for a target price of Rs, 1,734/share. The brokerage firm claims a potential upside of up to 20% from its current level keeping the assigned target price in view.

Buy for a Target Price of Rs.1,734/share

Nirmal Bang Said, "We hosted the management of Ajanta Pharma Ltd, represented by Mr. Arvind Agarwal - CFO and Mr. Rajeev Agarwal - AVP Finance & IR as part of two-day NBIE Conference to gain insights into the current business outlook. The management expects the Branded Generic markets of Asia and Africa to post mid to high teen growth while the India business is expected to outperform the IPM by 300-400bps. The management believes that EBITDA margin has bottomed out and an improvement is on the cards, with the same likely to revert to 25% in FY24, led by reduction in logistics costs and gross margin improvement."

It added, "The US business continues to remain a pain point due to incessant pricing pressure and the management intends to scale down investments in that market besides reducing revenue exposure to the US business to ~15% in the near to medium term (22% in FY23). The top priority for the management includes: (1) Cost control measures as over the last few years costs have risen substantially due to certain inefficiencies in the system. (2) Building the Branded Generic business and churning out key brands with significant market share. (3) Improvement in MR productivity."

"We remain positive on Ajanta Pharma given its branded play and strong focus on the domestic market. We maintain BUY on Ajanta Pharma with a target price (TP) of Rs1,734, valuing it at 24x on FY25E earnings," the brokerage said.

Stock Outlook

On NSE, the stock last traded at Rs. 1,455.10/share, down 0.98% from its previous close of Rs.1,469.50/share. The stock jumped 10.01% in 1 week, 12.71% in 1 month and 18.53% in 3 months, respectively. It gave 23.13% positive return in 1 year, 46.3% in 3 years and 123.55% in 5 years, respectively.

About - Ajanta Pharma Ltd.

Ajanta Pharma Ltd. is a Mid Cap Pharmaceutical sector company. The company is primarily engaged in the development, manufacturing and marketing of speciality pharmaceutical quality finished dosages. It has a market capitalisation of Rs, 18,643.49 crore.

Disclaimer - The stock has been picked from the brokerage report of Nirmal Bang. Greynium Information Technologies, the Author, and the respective Brokerage house are not liable for any losses caused as a result of decisions based on the article. Goodreturns.in advises users to consult with certified experts before making any investment decision.