Suven Pharma Gets 'Buy' On ICICI Securities Initiation, Sees 19% Upside

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ICICI Securities Report

Suven Pharmaceuticals Ltd.’s rapid ascendance in the contract development manufacturing organisation space has been remarkable. It has journeyed from being a small-molecule-focused CDMO to achieving eminence as one of the few CDMOs in India that offers contract manufacturing of oligonucleotides and ADCs.

Its merger with Cohance is slated for completion in Q1 FY26. Cohance’s ADC payload capabilities complement NJ Bio’s (acquired 56% stake in Dec’24) expertise in linker/bioconjugation technologies.

Separately, Sapala (67.5%) gets Suven a foot in the door in oligoneuclutides/nucleic acid building blocks segment. We peg Suven’s (combined entity) FY25–27E free cash flow at ~Rs 11.5 billion – an enabler to develop/acquire newer capabilities under its Horizon-2 targets.

Management is keen to achieve $1 billion in revenue by FY30 (27% CAGR over FY25–30E) and $2 billion by FY35 – via M&As and organic growth. Over FY24–27, we estimate the combined entity to register 18.8%/22%/21% revenue/Ebitda/PAT growth.

We initiate coverage on Suven with a Buy rating and a DCF-based target price of Rs 1,400.

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