Target: ₹602
CMP: ₹524.3
Suven Pharmaceuticals Ltd (SPL) is a pharmaceutical research expert, primarily operating in Contract Development And Manufacturing Operations (CDMO).
Suven Pharma’s total revenues grew by 40 per cent y-o-y to ₹364 crore with the CRAMS (Pharma) and Formulations segments recording a phenomenal growth of 51.8 per cent and 52.4 per cent y-o-y respectively.
EBITDA rose 68 per cent to ₹157 crore despite increased employee costs and raw material expenses. Resultantly, adjusted PAT was ₹92 crore up 10 per cent y-o-y. However, on a sequential basis, net profit was down 43 per cent.
Under Formulations, the company has filed 17 ANDAs (including two from Casper Pharma); 9 approved and 8 launched.
With its focus on expansion, acquisition of a formulations company, strong balance sheet and existing strong order book & client base, Suven is poised to sustain its growth momentum in the long term.
However, since the positive factors have already factored in for the short term, we downgrade our rating to ’Accumulate’ with a rolled forward target price of ₹602 based on 25x FY24 EPS.