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Differentiated approach – simplified…
Ajanta Pharma (APL) is a midcap pharma company with its focus on a few
emerging markets in the export space and a few therapies in the domestic
space. Adopting a slightly unconventional approach of not following the
time-tested business models, the company has come a long way by
demonstrating stand-out performances and handsome wealth creation for
shareholders. In the quest for new product launches, backed by strong
R&D support and management vision, the so called ‘differentiated
approach’ has helped APL to carve out its own niche in the crowded
midcap pharma space. We are initiating coverage on Ajanta Pharma as
the company offers a unique proposition in the midcap pharma space
with its self defined growth path.
Domestic formulations - Focus on new launches and few therapies…
APL has had a happy knack of launching maximum number of first time
launches with a focus on new drug delivery system (NDDS). Out of 160
actively marketed brands, 119 were first launches in India. Going ahead,
we expect domestic formulations to grow at 22% CAGR to | 711 crore in
FY14-17E to be driven by a mix of existing products and new launches.
Exports traction mainly from emerging markets…
APL currently derives almost its entire export revenues from emerging
markets. As opposed to the common practice of forging alliances with
local/regional pharmaceutical players, the company’s front-end marketing
team interacts directly with doctors. APL has consistently introduced new
products in these markets. We expect exports to grow at a CAGR of 24%
to | 1520 crore in FY14-17E driven by new product launches.
Low profile but focused; US foray important for scalability
With a focus on niche therapies in domestic formulations and a calculated
approach in the exports market, APL remains an interesting candidate
from the midcap pharma space with high growth rates, strong margins,
commendable return ratios and a lighter balance sheet. Defying the
normal trend of targeting the developed markets for generic generics,
initially, the company focused on branded generics in the semi-regulated
markets. At this juncture, the company is well poised to foray into the US
market, especially once the newly constructed Dahej plant gets USFDA
approval. We expect revenues, EBITDA and net profit to grow at a CAGR
of 24%, 20% and 17%, respectively. We have ascribed a target price of
| 2151 based on 20x FY17E EPS of | 107.6. We have a BUY
recommendation on Ajanta Pharmaceuticals as the company offers a
compelling investment argument.
�� India Equity Research Reports, IPO and Stock News Visit http://indiaer.blogspot.com/ for complete details ��
��
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Differentiated approach – simplified…
Ajanta Pharma (APL) is a midcap pharma company with its focus on a few
emerging markets in the export space and a few therapies in the domestic
space. Adopting a slightly unconventional approach of not following the
time-tested business models, the company has come a long way by
demonstrating stand-out performances and handsome wealth creation for
shareholders. In the quest for new product launches, backed by strong
R&D support and management vision, the so called ‘differentiated
approach’ has helped APL to carve out its own niche in the crowded
midcap pharma space. We are initiating coverage on Ajanta Pharma as
the company offers a unique proposition in the midcap pharma space
with its self defined growth path.
Domestic formulations - Focus on new launches and few therapies…
APL has had a happy knack of launching maximum number of first time
launches with a focus on new drug delivery system (NDDS). Out of 160
actively marketed brands, 119 were first launches in India. Going ahead,
we expect domestic formulations to grow at 22% CAGR to | 711 crore in
FY14-17E to be driven by a mix of existing products and new launches.
Exports traction mainly from emerging markets…
APL currently derives almost its entire export revenues from emerging
markets. As opposed to the common practice of forging alliances with
local/regional pharmaceutical players, the company’s front-end marketing
team interacts directly with doctors. APL has consistently introduced new
products in these markets. We expect exports to grow at a CAGR of 24%
to | 1520 crore in FY14-17E driven by new product launches.
Low profile but focused; US foray important for scalability
With a focus on niche therapies in domestic formulations and a calculated
approach in the exports market, APL remains an interesting candidate
from the midcap pharma space with high growth rates, strong margins,
commendable return ratios and a lighter balance sheet. Defying the
normal trend of targeting the developed markets for generic generics,
initially, the company focused on branded generics in the semi-regulated
markets. At this juncture, the company is well poised to foray into the US
market, especially once the newly constructed Dahej plant gets USFDA
approval. We expect revenues, EBITDA and net profit to grow at a CAGR
of 24%, 20% and 17%, respectively. We have ascribed a target price of
| 2151 based on 20x FY17E EPS of | 107.6. We have a BUY
recommendation on Ajanta Pharmaceuticals as the company offers a
compelling investment argument.
�� India Equity Research Reports, IPO and Stock News Visit http://indiaer.blogspot.com/ for complete details ��
��
LINK
http://content.icicidirect.com/mailimages/IDirect_AjantaPharma_IC.pdf
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