Ajanta Pharma shares gain after Jefferies initiates coverage with 'Buy' call, sees 11% upside

Ajanta Pharma gains after Jefferies initiates coverage with 'Buy' call, sees 11% upside

Shares of Ajanta Pharma Ltd. shares gained about 2 percent in early trading on April 15 after global brokerage Jefferies initiated coverage with a ‘Buy’ rating and a target price of Rs 2,850. Further, implying an upside of nearly 11 percent from the stock's last price.

Ajanta Pharma stock price is currently trading at Rs 2,612 which marks a gain of 1.87 percent.

Jefferies said Ajanta’s stronghold in high-entry-barrier branded generic markets across India, Asia, and Africa—which account for nearly 70 percent of its revenues—makes it stand out from peers. The firm praised Ajanta’s geographic mix, market-specific strategies, and consistent execution, which have driven steady double-digit growth in both revenues and earnings.

“Ajanta Pharma has delivered superior free cash flows, and we expect a robust 19% PAT CAGR between FY25 and FY27,” Jefferies said in its note.

Ajanta reported a 11 percent year-on-year jump in Q3 net profit at Rs 233 crore, even as revenue growth remained modest at 3.7 percent to Rs 1,146 crore. EBITDA was flat at Rs 320.8 crore, while margins slipped slightly to 28 percent from 29 percent in the same period last year.

The stock is largely a consensus ‘Buy’ on the Street. Out of 15 analysts covering Ajanta Pharma, 12 have a ‘Buy’ rating, while 3 recommend selling. Jefferies’ initiation could potentially lend fresh momentum to the stock, especially after a prolonged correction.

Ajanta’s differentiated strategy focuses on branded generics in less crowded markets, avoiding heavy competition in US generics. Its presence in Africa and Asia, where local knowledge and distribution networks are key, provides durability and pricing power—a contrast to peers more exposed to pricing pressure in the US.

The stock has been under pressure in recent months, partly due to margin concerns and sector-wide rotation, but Jefferies’ call suggests the fundamentals remain intact and earnings growth is expected to accelerate over the next two years.