ICICI Direct is bullish on Ajanta Pharmaceuticals has recommended buy rating on the stock with a target price of Rs 1810 in its research report dated July 31, 2020.
ICICI Direct's research report on Ajanta Pharmaceuticals
Q1FY21 revenues grew 9.2% YoY to Rs 668 crore mainly due to 46.1% growth in the US business to Rs 149 crore and 27.8% growth in Asia revenues to Rs 161 crore. Domestic revenues de-grew 10.3% YoY to Rs 174 crore. EBITDA margins improved 589 bps to 33.4% mainly due to lower other expenditure. Subsequently, EBITDA grew 32.6% YoY to Rs 223 crore. Net profit grew 28.9% YoY to Rs 148 crore. Delta vis-à-vis EBITDA was mainly due to higher tax rate and depreciation partially offset by higher other income.
The company remains a play on global branded generics space. We arrive at our target price of Rs 1810 based on 25x FY22E EPS of ~Rs 72.5.
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