Buy Rubicon Research; target of Rs 740: Motilal Oswal

Motilal Oswal is bullish on Rubicon Research recommended buy rating on the stock with a target price of Rs 740 in its research report dated October 29, 2025.

Broker Research

October 31, 2025 / 11:09 IST

buy

26 Aug, 2025 12:21

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Motilal Oswal's research report on Rubicon Research

Rubicon Research is a fast-growing research and development-driven pharmaceutical manufacturing company with a focus on regulated markets (particularly the US). Notably, over the past decade, Rubicon has built a sustainable moat through a) full spectrum capabilities across multiple dosage forms (oral solids, oral liquids, Nasal Sprays, Topicals) with a track record of successful specialty projects (170 scientist pool); b) building supporting manufacturing capacities with a consistent compliance track record of supplying to US markets; and c) focusing on commercial success. Over FY22-25, Rubicon’s revenue has increased at a CAGR of 60% to INR12.8b. From an operational loss of INR392m in FY22, it has posted EBITDA of INR2.5b in FY25 with a margin of 19.9%. Effectively, from a net loss of INR671m in FY22, it has reported PAT of INR1.3b in FY25. Accordingly, Rubicon delivered ROE of 29% in FY25.

Outlook

Considering a strong earnings CAGR of 43% over FY25-28 and 30%+ RoE (adj. for recent fresh issue), we believe Rubicon should command a premium valuation. Rubicon scores well-ahead of peers in pharma space on ROE*earnings CAGR matrix (pls refer Exhibit 50). Hence, we assign 35x (30% premium to sector multiple of 27x) 12M forward earnings to arrive at a TP of INR740. Initiate with BUY.

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