Target: ₹6,230
CMP: ₹5,497.80
EBITDA grew 32 per cent year on year, led by 15 per cent sales growth, higher gross margin (65.9 per cent), offset by higher costs (staff/R&D/SG&A +16 per cent/45 per cent/28 per cent).
The company expects:
- India business to beat IPM growth by 100-150 bps in FY27, led by increasing share from chronic share
- scale-up in GLP-1 franchisee, traction from key therapies and new launches
- its MR addition will remain strategic with focus on chronic business
- to remain cautious on near-term gross and EBITDA margin due to cost escalations ed by geopolitical issue, its targets to improve EBITDA margin by 100 bps per annum for the next few years
- the US business to see high-single-digit growth, led by new launches
- International export formulations to see high-teen growth over the next few years; and R&D at 4-5 per cent of sales
Semaglutide (GLP-1) launch has seen good progress (for its injectable), as the company was able to capture about 11 per cent market share, which should further improve in subsequent months.
Its oral solid form is progressing in late clinical phase, and the company targets filing for India approval in the near term.
Factoring in the FY26 performance, outlook and lower ETR, we have raised our EPS by 2 per cent/6 per cent for FY27/28E and revised the TP to ₹6,230 (28x FY28E EPS). ADD stays as we expect the India business to remain steady and the US business to scale up along with steady margin improvement.