Buy Innova Captab, target price Rs 1,120: JM Financial

JM Financial has a buy call on Innova Captab with a target price of Rs 1,120. The current market price of Innova Captab is Rs 900.05. The time period given by the analyst is a year when Innova Captab price can reach defined target. Innova, incorporated in 2005, is a Small Cap company with a market cap of Rs 5239.80 crore, operating in the pharmaceuticals sector.

Innova Captab's key products/revenue segments include Pharmaceuticals, Sale of services, Export Incentives and Scrap for the year ending 31-Mar-2024.



Financials
For the quarter ended 31-12-2024, the company has reported a Consolidated Total Income of Rs 320.79 crore, up 0.11 % from last quarter Total Income of Rs 320.42 crore and up 5.24% from last year same quarter Total Income of Rs 304.82 crore. The company has reported net profit after tax of Rs 34.20 crore in latest quarter.

The company's top management includes Mr.Manoj Kumar Lohariwala, Mr.Vinay Kumar Lohariwala, Mr.Jayant Vasudeo Rao, Mr.Archit Aggarwal, Mr.Sudhir Kumar Bassi, Mr.Shirish Gundopant Belapure, Ms.Priyanka Dixit Sibal, Mr.Mahender Korthiwada, Mr.Manoj Kumar Lohariwala, Mr.Vinay Kumar Lohariwala, Mr.Jayant Vasudeo Rao, Mr.Archit Aggarwal, Mr.Sudhir Kumar Bassi, Mr.Shirish Gundopant Belapure, Ms.Priyanka Dixit Sibal, Mr.Manoj Kumar Lohariwala, Mr.Mahender Korthiwada, Mr.Vinay Kumar Lohariwala, Mr.Jayant Vasudeo Rao, Mr.Archit Aggarwal, Mr.Sudhir Kumar Bassi, Mr.Shirish Gundopant Belapure, Ms.Priyanka Dixit Sibal, Mr.Mahender Korthiwada, Mr.Manoj Kumar Lohariwala, Mr.Vinay Kumar Lohariwala, Mr.Jayant Vasudeo Rao, Mr.Archit Aggarwal, Mr.Sudhir Kumar Bassi, Mr.Shirish Gundopant Belapure, Ms.Priyanka Dixit Sibal, Mr.Mahender Korthiwada. Company has B S R & Co. LLP as its auditors. As on 31-12-2024, the company has a total of 6 crore shares outstanding.

Investment Rationale
Despite the recent rally in stock price, Innova Captabs trades at 21x FY27 EPS. According to JM Financial, as the Jammu facility starts to scale-up and starts to deliver, there is scope for further increase in multiples. The management believe that Jammu can deliver a topline of Rs 4-5 billion in FY26 and can ramp-up to INR 14-16bn at optimal utilisation. The Jammu facility ramp-up will facilitate a Revenue/EBITDA/PAT CAGR of 34%/39%/41% over FY25-27. With a 20%+ ROIC, moderate working capital needs, strong OCF-to-EBITDA ratio and robust growth profile. The brokerage keeps its estimates unchanged for the company and value the company at 25x Mar?27 EPS to derive a target price of Rs 1,120.

Promoter/FII Holdings
Promoters held 50.9 per cent stake in the company as of 31-Dec-2024, while FIIs owned 0.74 per cent, DIIs 19.96 per cent.