Sumit Bilgaiyan
USFDA cleared Ajanta Pharma’s Dahej facility which was built with a capex of Rs 500 crore. While, the first block of its Guwahati facility which is dedicated for derma products started production during FY18, while the second phase’s expansion is underway and may see stabilisation by October 2018, company expects a contribution will start coming in FY20.
Apart from ramping up facilities and increasing capex company has also plans to acquire brands in India and abroad to supplement growth. In India, most of its core brands have stabilised and are showing growth.
Management also aims to strengthen its domestic presence. Apart from spending over Rs 800 crore in the last three years, it further plans to do capex of Rs 500 crore over a couple of years. Most of this capex will be spent on Guwahati facility’s second phase. We believe Ajanta Pharma is in a sweet spot and this valuation justify for the company. We have a buy rating on Ajanta Pharma.
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