Ajanta Pharma is implementing multiple strategic initiatives across focus branded generics markets of India, Asia, and Africa to sustain robust industry outperformance.
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Motilal Oswal Report
After posting a strong 23% earnings compound annual growth rate over FY23-25, Ajanta Pharma Ltd. has entered a consolidation phase in FY26 due to incremental investments in MRs for both base and newer therapies. The brokerage, thus, expect earnings growth to moderate to 11% YoY in FY26.
That said, the benefits of initiatives undertaken in FY26 should begin to accrue meaningfully in FY27, driving 20% YoY earnings growth. The brokerage has not yet factored in any semaglutide-related upside in FY28 earnings. Given the considerable scope of demand expansion and Ajanta Pharma’s robust franchise, the sales traction can be decent despite generics-led price erosion in Semaglutide across markets post-patent expiry.
Motilal Oswal estimates Ajanta Pharma’s potential sales from this opportunity in Asia and Africa at $25-30 million on an annualized basis in H2 FY28. Assuming a gross margin of 70% and limited additional operating costs, the Ebitda margin of this product should be healthy at 50-55%, driving additional Ebitda for Ajanta Pharma.
The brokerage value Ajanta Pharma at 30x 12M forward earnings to arrive at a target price of Rs 3,145. Reiterate Buy.
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