Anand Rathi's research report on Ajanta Pharma
Ajanta’s Q4 FY22 sales grew 15% to Rs8.7bn. Its India and Africa branded divisions and Asia reported stellar growth. More price erosion and keener competition, however, led to muted US business. Its gross margin slid 531bps to 72.5% y/y due to higher raw material prices and a one-time impact (1.5% of sales due to flu-related products written back, and 1.5% more due to price erosion in the US). Adjusting for this, the gross margin contracted 280bps y/y to 75%. Higher other expenses squeezed the EBITDA margin 1053bps to 23.7%. PAT fell 5.1% to Rs1.5bn. With launches, continuing momentum in India, other branded markets and a pick-up in the US, Ajanta would deliver 12% revenue/PAT growth each over FY22-24.
We retain our Buy with a lower TP of Rs2,378.
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