Target: ₹610
CMP: ₹553.05
Indegene’s acquisition of BioPharm strengthens its presence in brand activation and adds to marketing campaign execution capabilities. Total consideration to be paid for the acquisition is $104 million (including earnouts of $27 million), valuing BioPharm at 9.7x on trailing EV/EBITDA, as of CY24. BioPharm has a superior EBITDA margin profile of 27 per cent (on net revenue) and management expects the acquisition to be EPS accretive post 5-6 quarters.
BioPharm works with brand owners and has deeper capabilities in omnichannel digital marketing, brand activation and campaign execution. The acquisition brings deeper penetration across channels and marketing mix (email/programmatic/video/ display/social/native etc); rich data assets built over two decades (1.8mn and 3mn records) – to give broader, deeper view of HCP (healthcare professional) engagement; better penetration to TAs (therapeutic areas like oncology and rare diseases; and niche HCP universe like ophthalmology; and leadership, with 20+ years of industry experience.
We increase our revenue estimates by about 5/10/10 per cent and cut our EPS by 0.5/2.8/0.6 per cent for FY26/27/28 led by a cut in margin (due to the transaction, integrations and D&A expenses) and lower other income. We continue to value at 26x target multiple on Sep’27E-ending EPS of ₹23 to arrive at a target price of ₹610. Maintain Add.