Ajanta Pharma Share Target; Yes Securities Sees 42% Upside In Pharma Stock After Bonus Share Announcement

For the past year, Ajanta Pharma’s stock has been under sell-off pressure, with any advance in the pharma stock being viewed as a sell-on-rise opportunity. Ajanta Pharma’s stock has dropped roughly 25% year to date, from around 2214 to 1680 per share.

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Yes Securities, on the other hand, believes the company will emerge from its consolidation phase and provide significant long-term potential. The firm expects Ajanta Pharma’s stock price to rise to ₹2350 a share, a 42 percent increase from its current market price of ₹1680.

Yes Securities research paper highlights the reasons for being positive on Ajanta Pharma shares “In FY23, Ajanta Pharma expects a gross margin of 75 percent, comparable to FY22. Management announced a Rs2 billion increase in capex, as well as expenditures in advertising, product registration, and R&D.

As a result, EBIDTA growth will most likely mirror revenue growth in the current fiscal year. With considerable R&D for India/emerging markets, and projected respite from US price erosion, we believe gross margins have bottomed out, helped by price increases in non-NLEM portfolio domestic business.

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Increased opex investment guidance cuts FY24 margin and EPS expectations by 200bps and 9%, respectively “tively.”

Yes Securities report on its recommendation to positional investors in Ajanta Pharma shares reads, “Reduced FY24 estimates resulted in a TP fall to 2,350, however BUY remains intact at 26x PE. A successful FDA inspection would be a key trigger, allowing numerous significant items to be approved.”

Ajanta Pharma has issued a bonus issuance with a 1:2 ratio. In an exchange message, the pharma business announced of its Board of Directors decision, noting,

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“We thus tell you that at the Board meeting on Tuesday, May 10th 2022, the Board authorised, among other things, the issuing of bonus shares in the ratio of 1:2, i.e. one new fully paid-up equity share of Rs. 2/- to be issued for every two equity shares held, subject to shareholder approval.”

Disclaimer :- The views and recommendations made above are those of individual analysts or broking companies, and not of Ours.
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