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Buy Ajanta Pharma; target of Rs 2080: Motilal Oswal

Motilal Oswal is bullish on Ajanta Pharma recommended buy rating on the stock with a target price of Rs 2080 in its research report dated May 10, 2022.

May 12, 2022 / 02:33 PM IST
The research firm ICICI Securities believes earnings of apparel brands and retail companies under their coverage may surprise positively from Q3FY22E as the likely demand recovery may result in better than expected margin performance. Some of the costs savings achieved during pandemic may sustain and coupled with high operating leverage may lead to higher than pre-covid margins from Q3FY22E.  Stocks like Trent, V-Mart and Aditya Birla Fashion and Retail are the preferred picks backed by their strong and consistent track record of execution.

The research firm ICICI Securities believes earnings of apparel brands and retail companies under their coverage may surprise positively from Q3FY22E as the likely demand recovery may result in better than expected margin performance. Some of the costs savings achieved during pandemic may sustain and coupled with high operating leverage may lead to higher than pre-covid margins from Q3FY22E.  Stocks like Trent, V-Mart and Aditya Birla Fashion and Retail are the preferred picks backed by their strong and consistent track record of execution.

 
 
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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.



Outlook


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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first published: May 12, 2022 02:33 pm
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