Buy Ajanta Pharma; target of Rs 1758: Firstcall Research

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Firstcall research report on Ajanta Pharma

Ajanta Pharma - a speciality pharmaceutical formulation company has leading brands in therapeutic segments of Ophthalmology, Dermatology, Cardiology and pain management. Many of company's products are first in the market place and are leading in their sub therapeutic segments. Company has a well-established branded generic business in emerging markets. It has recently entered the regulated markets of USA and is building a portfolio of ANDAs for this market.

Company's state of the art R&D centre for formulation development is located at Mumbai, having a team of 350+  people. Company has world class manufacturing facilities - 4 located in India and 1 at Mauritius. One of the manufacturing facilities in India is approved by US FDA, UK MHRA, pre-qualification from World Health Organization (WHO), apart from having the approval from FDAs of many other countries. Company is setting up two more manufacturing facilities in India, one for regulated markets and another for domestic and emerging markets.

For last 5 years, company has posted healthy performance with its consolidated revenue showing a CAGR of 31% and net profit of 62%.

 >>At the current market price of Rs. 1598.65, the stock P/E ratio is at 20.45 x FY15E and 17.95 x FY16E respectively.

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>>Earning per share (EPS) of the company for the earnings for FY15E and FY16E is seen at Rs.78.16 and Rs.89.06 respectively.

>>Net Sales and PAT of the company are expected to grow at a CAGR of 22% and 46% over 2013 to 2016E respectively.

>>On the basis of EV/EBITDA, the stock trades at 12.61 x for FY15E and 10.96 x for FY16E.

>>Price to Book Value of the stock is expected to be at 8.76 x and 7.46 x respectively for FY15E and FY16E.

We recommend ‘BUY’ in this particular scrip with a target price of Rs.1758.00 for Medium to Long term investment.

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Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.

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