ICICI Direct has given Hold recommendation for Hikal with a target price of Rs. 590 in its research report issued on Aug 07, 2021

ICICI Direct’s research report on Hikal

Hikal is predominantly a B2B player that provides intermediates and active ingredients to global pharmaceutical, animal health, crop protection and specialty chemical companies. Pharma and crop protection are 62% and 38% of operating revenues. The pharma business is currently divided in 59:41 ratio of APIs and CDMO. Animal health business accounts for 20-25% of CDMO business In crop protection, 69% revenues are derived from CDMO while remaining from proprietary products, specialty chemicals & specialty biocides

Outlook

We change our view from BUY to HOLD on account of the sharp run up. The stock is already factoring in most of the positive aspects We value Hikal at Rs 590 i.e. 30x P/E on FY23E EPS

 

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