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Nirmal Bang Report
Ajanta Pharma Ltd. Q2 FY24 results beat our and consensus estimates on margins front, though revenues were in line.
Revenues grew ~10% YoY mainly due to market beating 13% growth in the domestic market, further supported by the U.S. business, which saw pricing pressure stabilise, the trend which the company believes will continue for the rest of FY24.
Ebitda margin guidance was upped to 26% (from 25% earlier) on the back of normalizing raw material and freight costs as well as favorable currency movement.
After a subdued FY23, the beginning of FY24 was strong with better-than expected improvement in margin, along with robust domestic growth. We remain positive on Ajanta Pharma given its branded play and strong focus on the domestic market.
We maintain 'Buy' on Ajanta Pharma with a revised target price of Rs 2047, valuing it at 25 times on September 25E earnings.
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