Buy Suven Pharmaceuticals; target of Rs 560: ICICI Direct

ICICI Direct's research report on Suven Pharmaceuticals

Q4FY21 revenue grew 40.3% YoY to Rs 259 crore amid 51.3% YoY growth in pharma CRAMS sales to Rs 137.7 crore. Specialty chemical CRAMS also posted robust growth of 35.1% YoY to Rs 109 crore. However, formulation sales fell 36% YoY to Rs 12.1 crore. EBITDA margins declined 566 bps YoY to 36.2% mainly due to lower gross margin performance (down 658 bps YoY at 64.7%). Subsequently, EBITDA grew 21.3% YoY to Rs 94 crore. PAT was up 12% YoY to Rs 83 crore. Delta vis-a-vis EBITDA was due to higher tax rate and lower profit share from associates.

Outlook

We maintain BUY with a TP of Rs 560 (earlier Rs 575) based on 28x FY23E EPS of Rs 20.0.

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