Concord Biotech shares were trading 3 percent higher on September 22nd after Kotak Institutional Equities and Antique Broking initiated coverage of the company with a positive outlook on the stock.
Kotak Institutional Equities based on strong discounted cash flows and the company’s expertise in high entry barrier fermentation active pharmaceutical ingredients (API) segment sees a 15 percent upside potential from the current price levels. It has an ‘add’ rating on the company’s stock and has set a target price of Rs 1,110 per share.
“Led by healthy underlying demand trends, market share growth in existing molecules driven by recent capacity expansions and new launches, we expect Concord to report healthy sales and earnings per shares CAGR of 22 and 27 percent respectively, over FY2023-26E,” the brokerage said.
Antique Brokings has a ‘buy’ rating on the stock and has set a target price of Rs 1,340 per share.
“Concord Biotech commands over more than 20 percent market share by volume across fermentation-based key API products. Going forward, we expect the company to improve the market share of its top five products on the back of genericization, coupled with new launches in the anti-infective and oncology segments. We also expect Concord's revenue to grow by 21 percent on a three-year CAGR basis, with EBITDA margin improving to 45 percent and EPS to grow at 27 percent CAGR, by FY26,” Antique said.
At 1.45 pm, Concord Biotech stock was quoting at Rs 988.90, up Rs 22.45, or 2.32 percent on the NSE.
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In its results for the April-June quarter, the company reported a 7.73 percent year-on-year (YoY) rise in revenue from operations at Rs 195 crore. Net profit for the quarter increased 10.20 percent YoY to Rs 54 crore. The operating profit margins for the quarter expanded by 100 basis points on a yearly basis to 37 percent.
Concord Biotech is engaged in the business of biotechnology and pharmaceuticals. The company specializes in the research, development, and manufacturing of active pharmaceutical ingredients (APIs) and intermediates for various therapeutic applications.
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