Buy Ajanta Pharma, target price Rs 2500: ICICI Direct

ICICI Direct has buy call on Ajanta Pharma with a target price of Rs 2500. The current market price of Ajanta Pharma is Rs 2294.1. Time period given by analyst is one year when Ajanta Pharma Ltd. price can reach defined target.

Ajanta Pharma Ltd., incorporated in the year 1979, is a Mid Cap company (having a market cap of Rs 19942.17 Crore) operating in Pharmaceuticals sector.

Ajanta Pharma Ltd. key Products/Revenue Segments include Pharmaceutical Products, Export Incentives and Other Operating Revenue for the year ending 31-Mar-2021.



Financials
For the quarter ended 30-09-2021, the company reported a Consolidated Total Income of Rs 914.34 Crore, up 17.13 % from last quarter Total Income of Rs 780.62 Crore and up 26.86 % from last year same quarter Total Income of Rs 720.76 Crore. Company reported net profit after tax of Rs 195.94 Crore in latest quarter.


Investment Rationale
Revenues are expected to grow ~10.7% YoY to Rs 829.1 crore on the back of ~12.6% growth in domestic formulations and ~7.9% growth in export formulations. EBITDA margins are expected to decline 387 bps YoY to 28.4% mainly due to increase in raw material expenditure (gross margins down 497 bps YoY). EBITDA is likely to decline 2.5% YoY to Rs 235.5 crore. Adjusted PAT is expected to decline 8.7% YoY to ~Rs 161.3 crore.

Promoter/FII Holdings
Promoters held 70.34 per cent stake in the company as of 31-Dec-2021, while FIIs owned 8.95 per cent, DIIs 12.14 per cent.