Hold Suven Pharmaceuticals; target of Rs 555: ICICI Direct

ICICI Direct's research report on Suven Pharmaceuticals

Dedicated CRAMs that supports the global life sciences industry & fine chemical majors in their NCE development endeavours. Its services include custom synthesis, process R&D, scale-up & contract manufacturing. In FY22, CRAMs Pharma vertical contributed 59% of sales. Besides CRAMs Pharma, Suven has also has developed & supplied intermediates/technical for specialty chemicals CRAMs, which accounted for 35% of sales • Suven is currently on a three pronged investment plan, 1) relocating R&D centre, 2) replacement and upgradation of blocks at Suryapet facility and 3) additional new block in line with FDA regulations at Pashamylaram facility.

Outlook

Maintain HOLD as strong CRAMs franchisee notwithstanding, expansion in formulations to bring its own set of challenges. Valued at Rs 555 i.e. 30x P/E on FY24E EPS of Rs 18.5.