Buy Ajanta Pharma; target of Rs 1700: Motilal Oswal
Motilal Oswal is bullish on Ajanta Pharma has recommended buy rating on the stock with a target price of Rs 1700 in its research report dated May 20, 2020.
May 21, 2020 / 08:26 PM IST
Motilal Oswal 's research report on Ajanta Pharma
Ajanta Pharma (AJP) ended FY20 on a healthy note with 15% earnings growth (v/s 12% compounded earnings decline over FY17-19), led by sales revival in Asia, Africa and new introductions in the US market. The company’s major capex program would conclude in FY21 and only maintenance capex would be required FY22E onwards, indicating better free cash flow situation for AJP.
We reduce our EPS estimate for FY21 by 6% to factor in the COVID-19 led slowdown in the branded generics segment. Rollover to 22x (unchanged) 12M forward earnings gives us a price target of INR1,700 (from INR1,635 earlier). Maintain Buy.
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