Ajanta Pharma Ltd. share price target

Despite lower-than-expected growth in domestic formulations business, Ajanta Pharma (AJP) has delivered a better-than-expected sales performance in 4QFY18 led by strong growth in African branded business. Gross margin improved by 167bps YoY due to better product mix. However, reported EBITDA margin was below our estimate (26.3% vs our estimates of 28.3%) due to higher than expected employee cost and other expenses related to newly commissioned facilities (Guwahati and Dahej). EBITDA was down 13.6% YoY to Rs 1.4bn (in-line with our estimates) which drove PAT decline of 17.1% YoY to Rs 945mn (below our estimates of Rs 991mn). As per the Management, the Company would file 10-12 ANDAs with the US FDA in FY19. Domestic business...

Valuation: At CMP of Rs. 1391.8mn, Ajanta Pharma Ltd. is trading at a P/E multiple of 25.2(x) compared to the industry peer of 27.6(x). The company has an upside potential of 25% to 30% in the next 12 to 18 months. We arrive at a target price in...

We recently met Ajanta Pharma's (AJP) management to get updates on its business segments. Rejigged strategies by the company in a favorable business environment have started yielding results in Asia, while its enhanced focus on Anglo Africa is expected to support growth in Africa???s branded generics business. AJP has also re-strategized to improve growth in dermatology in the domestic formulations segment, and remains on track to outperform industry. We maintain our estimates and re-iterate our Buy rating, with a price target of INR1,840, driven by superior execution in branded generics and a robust product pipeline for the US market.

Ajanta Pharma reported a 10% YoY growth in revenues for the quarter driven by ~80% YoY growth in Asian sales to INR 1610 million. The US sales saw a growth of ~20% YoY during the quarter to INR 710 million. The company believes the severity of the pricing pressure to have reduced substantially in the US. The company maintained its EBITDA margins YoY at 33.6%,...

ICICI Securities Ltd | Retail Equity Research Revenues grew 10% YoY to | 587 crore (I-direct estimate: | 553 crore) mainly due to 15% growth in export formulations, led by 79% growth in the Asia business to | 161 crore and ~20% growth in the US to | 71 crore. Domestic sales grew 4% YoY to | 155 crore EBITDA margins improved 36 bps YoY to 33.6% (I-direct estimate: 33.5%) mainly due to an improvement in gross margins by 123 bps YoY to 81.3%. EBITDA increased 11% YoY to | 198 crore...

Inventory has been gradually restoring post GST roll-out from very low levels,and the streamlining of supply-side system is leading to sustained better off-take in domestic formulation (DF). A JP is building a facility at Guwahati to reduce outsourcing, and thus, ensure better administrative control/compliance and also enjoy tax benefits. Although only five ANDAs were filed for the US market in 1HFY18, the company has maintained its guidance of 10-15 filings over FY18. After declining sharply in 2QFY18, US sales are expected to pick up, l ed by the launch of recently approved products and increased traction in existing products.AJP has been selected as a supplier in the institutional anti-malaria business from the Global Fund, but is yet to obtain orders. The company maintained its guidance of 15-20 % YoY lower sales in FY18 due to lower allocation from the Global Fund.

Ajanta Pharma Limited is a specialty pharmaceutical company engaged in developing, producing and marketing a range of branded and generic formulations. Its business includes branded generics in emerging markets of Asia and Africa, generics in the developed markets of the United States and Institutional sales. The branded generics business is spread in India and over 30 emerging countries across Africa, Commonwealth of Independent States (CIS), the Middle East and South East Asia. Company's Institutional business comprises of supplies to various government bodies in India and supply of Anti-Malarial products under WHO approved programs in Africa....

ICICI Securities Ltd | Retail Equity Research Revenues grew 5% YoY at | 540 crore (I-direct estimate: | 506 crore) mainly due to 13% YoY growth in domestic sales to | 178 crore (Idirect estimate: | 173 crore). Export formulations grew marginally by 1% to | 350 crore (I-direct estimate: | 317 crore) EBITDA margins increased 51 bps YoY to 34% (I-direct estimate: 29.1%). Improvement in gross margins by 242 bps YoY to 80% was largely offset by 256 bps increase in employee expenses to 16.5% Adjusted net profit remained flat YoY at | 132 crore (I-direct...

Growth Momentum to Continue in Domestic Biz; Maintain BUY Led by recovery in domestic formulations business and robust performance in African business, Ajanta Pharma (AJP) has delivered a better-than-expected performance in 2QFY18. Its revenues, EBITDA and PAT stood at Rs 5.4bn (vs. our estimate of Rs 4.8bn), Rs 1.8bn (vs. our estimate of Rs 1.4bn) and Rs 1.3bn (vs. our estimate of Rs 1.0bn), respectively. EBITDA margin at 34.0% exceeded our estimate of 29.0% led by better product-mix and recovery in domestic business. Notably, AJP's US sales dipped 63% YoY to Rs260mn primarily owing to price erosion in base business product portfolio following channel consolidation. Notably, AJP plans to file 12-15 ANDAs with...

Ajanta Pharma's (AJP) 2QFY18 financial performance was better than expectations, with sales at INR5.4b (est. of INR5b), EBITDA margin at 34% (est. of 29%) and PAT at INR1.3b (est. of INR1b). DF and Africa drive growth: Sales grew 4.8% YoY, led by strong institutional anti-malaria sales and a recovery in domestic formulation (DF) business. However, a decline in US sales and moderate growth in Asia sales adversely affected overall sales growth for the quarter. Superior product mix and higher operating leverage led to 40bp YoY (+640bp QoQ) expansion in EBITDA margin....