Ajanta Pharma Shares Hit Record High After Q1 Profit Beats Estimates

Shares of Ajanta Pharma Ltd. surged over 7% to hit a record high after its first-quarter profit beat analysts' estimates.

The pharmaceutical company's net profit rose 19% year-on-year to Rs 208 crore in the quarter ended June, according to an exchange filing. That compares with Bloomberg's estimate of Rs 150 crore.

Ajanta Pharma Q1 FY24 Results Highlights: (Consolidated YoY)

• Revenue up 7% at Rs 1,021 crore. (Bloomberg estimate : Rs 1,009 crore)

• Ebitda up 22% to Rs 271 crore. (Bloomberg estimate : Rs 232 crore Profit)

• Margins at 26.6% versus Bloomberg estimate of 23%.

• Net profit up 19% to Rs 208. (Bloomberg estimate: Rs 150 crore).

Here's what analysts have to say about the Q1 earnings

Motilal Oswal

• The brokerage firm reiterates 'buy' rating with a target price of Rs 1,800, implying an upside return potential of 9.09%.

• The company benefited from lower raw material and freight costs in the first quarter of FY24 and expects the same to continue over the near-to-medium term.

Nirmal Bang Institutional Research

• Revenues grew 7.4% year-on-year, mainly due to robust 14.3% growth in the domestic market, which was partially offset by the decline in Africa business due to supply chain issues, which have now normalise.

• Nirmal Bang remains positive on Ajanta Pharma given its branded play and strong focus on the domestic market. 

Shares of the company rose 7.20% to Rs 1,664.40 apiece as of 9:57 a.m., as compared to a 0.01% gain in the NSE Nifty 50. The scrip gained as much as 9.37% intraday to hit a record high. It has risen 37.38% on a year-to-date basis.

The relative strength index was at 79, indicating the stock may be overbought. Total traded volume stood at 50.6 times its 30-day average.

Out of the 16 analysts tracking the company, 15 maintain a 'buy' rating and one recommends a 'hold', according to Bloomberg data. The average 12-month consensus price target implies a potential downside of 2.2%.