(Rating: BUY, TP: Rs2,620, Upside: 10%)
- We see a firm margin trajectory over next three years driven by 1) India rebound in FY22 and revival in US from FY23 2) MR rationalization to improve productivity and be beneficial for domestic margin.
- Domestic business to benefit from over 20 launches last year which have not been fully monetized and promoted; hence we stick to our 14% India growth in current fiscal.
- US sales could be impacted near term due to curtailed launches as filings were impacted last year. Albeit, US seen back on track with 17-18% growth next fiscal.
- Company affirmed margin at ~30% and indeed, we reckon, can inch up to 31-32% especially if volumes ramp after Guwahati capex.
- We build in FY24 estimates and roll over an unchanged target 26x PE to arrive at a revised TP Rs2,620. A smaller base and share of US revenues would preempt some of the margin volatility seen at peers. BUY stays.
Shares of AJANTA PHARMA LTD. was last trading in BSE at Rs. 2289.1 as compared to the previous close of Rs. 2394.15. The total number of shares traded during the day was 17881 in over 3292 trades.
The stock hit an intraday high of Rs. 2381.65 and intraday low of 2270. The net turnover during the day was Rs. 41410342.