Motilal Oswal's research report on Ajanta Pharma
Ajanta Pharma (AJP) posted in-line 4QFY22. Superior show in Asia/domestic formulation (DF)/Africa (branded generics) was offset by increased competition in the US generics market and incremental cost pressures. We have cut our FY23E/FY24E EPS by 6%/7%, respectively, to factor in increased raw material/supply chain costs, higher price erosion in the US generics and muted institutional anti-malaria sales. We value AJP at 22x 12M forward earnings to arrive at our TP of INR2,080. We believe AJP will sustain outperformance in the branded generics segment of DF/Africa/Asia aided by new launches, market share gains in existing products and price hikes to some extent. While the near-term outlook would be subdued, the higher pace of filings/approvals would improve the growth prospects in the US generics segment. Maintain BUY.
We value AJP at 22x 12M forward earnings to arrive at our TP of INR2,080. We remain positive on AJP on the back of a better-than-industry performance in the branded generics segment of DF/Africa/Asia and a robust ANDA pipeline in the US market. We maintain our BUY rating on the stock.
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