Hold Ajanta Pharmaceuticals; target of Rs 1010: ICICI Direct
ICICI Direct recommended hold rating on Ajanta Pharmaceuticals with a target price of Rs 1010 in its research report dated August August 01, 2019.
August 02, 2019 / 11:11 AM IST
ICICI Direct's research report on Ajanta Pharmaceuticals
Revenues grew 19.8% YoY to Rs 611.9 crore (I-direct estimate: Rs 565.7 crore) mainly due to 67.2% YoY growth in the US to Rs 102 crore and 50% YoY growth in African tender business to Rs 81 crore. Domestic formulations grew 9% YoY to Rs 194 crore (I-direct estimate: Rs 200.7 crore). EBITDA margins declined 330 bps YoY to 27.5% (I-direct estimate: 28.0%) due to lower gross margins. EBITDA grew 6.9% YoY to Rs 168.4 crore (I-direct estimate: Rs 158.4 crore). Net profit grew 8.4% YoY to Rs 114.6 crore (I-direct estimate: Rs 109.5 crore) mainly in sync with the operational performance.
Overall, we expect double digit growth in revenues but dent in gross profit, EBITDA and net profit margins due to a change in the product mix (higher US contribution), new plant related expenses and higher depreciation. We arrive at our target price of Rs 1010 based on 20x FY21E EPS of ~Rs 50.5.
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