On September 22nd, Concord Biotech witnessed a 3 percent boost in its shares, following the initiation of positive coverage by Kotak Institutional Equities and Antique Broking.
Kotak Institutional Equities, leveraging robust discounted cash flow analysis and Concord Biotech’s prowess in the high entry barrier fermentation-based active pharmaceutical ingredients (API) segment, foresees a promising 15 percent upside potential from the current market price. The brokerage has bestowed an ‘add’ rating upon the company’s stock and set a target price of Rs 1,110 per share.
Driven by strong underlying demand dynamics, increased market share in existing molecules due to recent capacity expansions, and fresh product launches, Kotak anticipates Concord to deliver a robust sales and earnings per share (EPS) compound annual growth rate (CAGR) of 22 and 27 percent respectively, spanning FY2023-26E.
Antique Broking echoes this optimism, offering a ‘buy’ rating and establishing a target price of Rs 1,340 per share.
With over 20 percent market share by volume in fermentation-based critical API products, Antique Broking expects Concord Biotech to enhance its market presence in the top five products. This will be facilitated by genericization and the introduction of new offerings in the anti-infective and oncology sectors. The brokerage also envisions Concord’s revenue to surge at a three-year CAGR of 21 percent, coupled with an improved EBITDA margin of 45 percent and an EPS growth rate of 27 percent CAGR by FY26.
As of 1:45 pm, Concord Biotech’s stock was trading at Rs 988.90, marking a gain of Rs 22.45 or 2.32 percent on the NSE.
For the April-June quarter, the company reported a YoY revenue increase of 7.73 percent, reaching Rs 195 crore. Net profit for the quarter also witnessed a YoY rise of 10.20 percent, reaching Rs 54 crore. The operating profit margins for the quarter expanded by 100 basis points compared to the previous year, reaching 37 percent.
Concord Biotech specializes in biotechnology and pharmaceuticals, focusing on research, development, and manufacturing of active pharmaceutical ingredients (APIs) and intermediates for various therapeutic applications. This positive coverage reflects the company’s potential for growth and its position within the pharmaceutical industry.