Ajanta Pharma Ltd. share price target

ICICI Securities Ltd | Retail Equity Research Ajanta Pharma's Q2FY19 results were above I-direct estimates on all fronts mainly on account of a beat in export sales and higher other income. Revenues grew 0.7% YoY to | 544.1 crore. Muted growth was mainly due to the high base of restocking in domestic market post GST implementation and shrinking in African tender business. Beat vis--vis I-direct estimates was due to strong US sales EBITDA margins contracted 345 bps YoY to 30.5% (I-direct...

ICICI Securities Ltd | Retail Equity Research Revenues grew 8% YoY to | 511.0 crore (I-direct estimate: | 473.6 crore) mainly due to 24.5% YoY growth in domestic formulations to | 178.0 crore (I-direct estimate: | 175.0 crore) and 34.4% growth in Asia business to | 129 crore (I-direct estimate: | 134 crore) EBITDA margins improved 320 bps YoY to 30.8% (I-direct estimate: 25.8%) mainly due to strong gross margins and lower other expenditure. EBITDA grew 20.5% YoY to | 157.5 crore...

Revenue fell by 9.67% to Rs. 530.31 Cr in Q4FY18 when compared to the previous quarter. Ajanta Pharma Ltd Q4FY18 Results Comment

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.