Target: ₹762

CMP: ₹617.80

The company’s revenue surged to an impressive ₹595.4 crore, marking a substantial 17 per cent year-on-year increase and a commendable 3 per cent quarter-on-quarter rise. EBITDA also demonstrated robust performance, climbing to ₹167.1 crore, reflecting a notable 16 per cent year-on-year growth despite a 14 per cent quarter-on-quarter decrease.

Experiencing a noteworthy 19.7 per cent year-on-year boost, Generic API revenues in Q2 FY24 soared to ₹542.8 crore, primarily fuelled by robust expansion within regulated markets.. However, CDMO revenues stumbled to ₹25.3 crore, reflecting an 18.1 per cent year-on-year decline.

Efforts are underway to bolster operations, with 208 KL of the Intermediate block currently undergoing construction at the Ankleshwar site, constituting part of the overall manufacturing capacity of 400 KL, set to commence operations during the second half of FY24. Additionally, a promising 50-KL pharma capacity is slated for implementation this year in Dahej. Moreover, in Solapur, the detailed engineering process has initiated for the establishment of 200 KL in phase 1, contributing towards the realisation of an estimated total capacity of approximately 500 KL, anticipated to be fully operational by FY26.

Based on the product pipeline and the continuous growth in the CDMO business, we have a positive outlook on the stock.