Motilal Oswal's research report on Ajanta Pharma
Ajanta Pharma (AJP) delivered 1QFY22 earnings marginally below our expectation. Robust growth in Domestic Formulation (DF) / Branded Generics (Africa) was offset by moderate growth in US / Branded Generics (Asia) and enhanced opex towards marketing and promotional activities. AJP is on track to outperform in the Branded Generics segment across DF/Asia/Africa and build a product pipeline for the US market. We tweak our estimates for FY22E/FY23E, factoring in a) a better outlook for the Pain Management, Opthal, and Derma therapies in the DF segment, b) higher opex in DF due to the ophthalmic unit’s commercialization, and c) enhanced growth in branded formulations in EMs, with the easing of the COVID situation.
Outlook
We value AJP at 25x 12M forward earnings to arrive at Target Price of INR2,780. Reiterate Buy.
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