Buy Shilpa Medicare; target of Rs 805: Motilal Oswal

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26 Aug, 2025 12:21

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Motilal Oswal's research report on Shilpa Medicare

We recently met Shilpa Medicare’s (SLPA) management to get an update on its business segments. The company is progressing well on ANDA filings, with cumulative pending approvals of 26. With a low base in the US market, sales there are expected to ramp-up, led by its existing products and new approvals. We expect SLPA to deliver US revenue of INR4b in FY20, significantly higher than INR250m in FY17. The company is well positioned in the Europe market too, with marketing authorization in place and likely tie-ups with marketing agencies. In addition to injectables, SLPA has started R&D in transdermal patches. We continue to like SLPA, as the key positives are in place to drive 42% earnings CAGR over FY17-20E. We maintain our price target of INR805, based on 12M forward earnings, and reiterate Buy.

Outlook

We remain positive on SLPA, given its healthy oncology product pipeline for the US/Europe, and forward integration toward formulation.  In addition, SLPA has a successful compliance history, which is one of the critical factors to succeed in the US market. We expect SLPA to deliver 42% CAGR  in PAT to  INR3b in FY20. At CMP of INR585, SLPA is trading at 27.7x FY18E EPS of INR21.1 and 19.2x FY19E EPS of INR30.4. We reiterate Buy on SLPA with a price target of INR805, based on 25x 12M forward earnings.

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