Buy Ajanta Pharma; target of Rs 3000: Motilal Oswal

Motilal Oswal's research report on Ajanta Pharma

Ajanta Pharma (AJP)’s 2QFY26 revenue was slightly above our expectation (3.5% beat). EBITDA and PAT were largely in line and grew at a lower rate compared to revenue growth for the quarter. Product mix across geographies and higher opex to enhance traction in newer therapies in the domestic formulation (DF) segment kept EBITDA/PAT growth under check.AJP is outperforming the industry in its core therapies (ophthalmology, dermatology, and pain therapies) within the DF segment. Additionally, it is improving traction in newer therapies like gynecology as well as nephrology.

Outlook

We value AJP at 30x 12M forward earnings to arrive at our TP of INR3,000. Considering superior execution across key markets supported by product launches as well as strengthening the field force, we expect AJP to deliver sustained growth over the next 3-5 years. Reiterate BUY.