Motilal Oswal has given Buy recommendation for Ajanta Pharma with a target price of Rs. 2030 in its research report issued on Feb 02, 2021
Motilal Oswal’s research report on Ajanta Pharma
Ajanta Pharma (AJP) delivered higher than expected earnings, led by superior growth in the Branded Generics segment. This was further supported by a lower tax rate in 3QFY21. While the pace of ANDA filing has moderated in 9MFY21 due to COVID-related disruptions, it would improve with the easing of lockdown restrictions. We have raised our FY21E/FY22/FY23E estimates by 7.4%/7.1%/6.5% to factor in: a) recovery in DF/Asia/Africa, b) robust ANDA pipeline, and c) improved capacity utilization. We continue to value AJP at 23x 12 months forward earnings to arrive at our PT of INR2,030. We remain positive given its: a) improved outlook in the Branded Generics segment, b) superior growth in US Generics, aided by consistent compliance, c) minimal financial leverage and healthy return ratios. Maintain Buy.
We continue to value AJP at 23x 12-months forward earnings to arrive at a target price of INR2,030.
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