Buy Aarti Drugs; target of Rs 940: Centrum Research

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26 Aug, 2025 12:21

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Centrum's research report on Aarti Drugs

We initiate coverage on Aarti Drugs (ADL), with Buy rating and TP of Rs940 (25% upside). ADL is a leading player in the domestic APIs and markets over 30 products. The company has strong presence in Asia, Latin America, Europe and Africa.  ADL is the market leader in Ciprofloxacin, Metronidazole and Celecoxib in the domestic market. We expect ADL to achieve 14% revenue, 15% EBITDA and 19% net profit CAGR over FY17-FY20E. The company also supplies Specialty Chemicals and intermediates for APIs.

Outlook
We have valued the stock on  our conservative 5-year AOCF/EV yield of 4.15% to arrive at target price of Rs940. Key risks to our assumptions include slowdown of the domestic pharma market and regulatory issues for its manufacturing facilities.
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