Small Cap Pharma Stock To Trade Ex-Dividend This Week, "Buy" For 17% Upside, Says Axis Securities

Axis Securities recommends a "BUY" rating on the stock of Aarti Drugs Ltd. with a target price of Rs 490 apiece, which implies a potential upside of up to 17% from its current market price. The stock in its Board meeting held on January 27, 2023, declared the Interim Dividend. It also announced the record date for the same. The stock will trade ex-dividend this week. It has a market capitalisation of Rs 3,882.26 crore. Below are the key details of the stock:

Aarti Drugs Ltd Stock Performance

The current market price of Aarti Drugs on NSE is Rs 419.25 apiece, gaining 4.43% compared to its previous close of Rs 402.20 apiece. In a week it gained 2.22%. However, in the past 1 month, it declined 6.81% and in the past 3 months, it declined by 9.71%, respectively. In the past 1 year, it declined by 18.39%. It gave 185.81% robust return in 3 years and 184.26% robust return in 5 years, respectively. Its 52 week low is Rs 378 apiece recorded on 23 June 2022 and 52 week high on 7 February 2022 at Rs 536.40 apiece, respectively.

Aarti Drugs Ltd Declared the Interim Dividend of Rs 1/- per equity share

Board of the Directors of Aarti Drug Ltd. in their regulatory filing to BSE said, "We wish to inform you that the Board of Directors of the Company at its Meeting held on Friday, January 27, 2023, has declared the Interim Dividend of Re. 1/- (Rupee One) (@10%) per Equity share of Rs. 10/- each for the financial year 2022-23. Please note that as per Regulation 42(1)(a) of the SEBI (LODR) Regulations, 2015, Wednesday, February 8, 2023 has been fixed as 'Record Date' for the purpose of payment of Interim Dividend."

Valuation - Buy for a target price of Rs 490 apiece

According to Axis Securities, API sector is experiencing the low export demand and high competition in domestic market due to Chinese products, led to overall fall in realisations. "Fall in raw material prices also led to inventory losses that could impact gross margins on lower side. We believe demand could revive in 1HFY24E with the improvement in global economy," the brokerage has said.

Current Valuation: PE 14x for FY25 earnings (Earlier Valuation: PE 15x)
Current TP: Rs 490/share (Earlier TP: Rs 525/share)
Recommendation: BUY

Disclaimer

The stock has been picked from the brokerage report of Axis Securities. 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.