Target: ₹366

CMP: ₹319.60

The company reported a significant increase in revenue to ₹2,023 crore and EBITDA to ₹257 crore, compared with the previous year’s ₹1,943 crore and ₹341 crore, respectively, showcasing its ability to navigate challenging market conditions successfully. The growth is due to the implementation of various strategic initiatives, including cost management, supply chain optimisation, procurement streamlining, productivity enhancement, product mix optimisation, and automation.

In the latest quarter, pharmaceutical sales remained steady, with revenues totalling ₹309 crore, almost unchanged from ₹308 crore in Q4 FY22. The company’s focus on business excellence initiatives has contributed to an improvement in margins during this period. Moreover, the company has experienced enhanced traction from both existing and new customers in its CDMO business, indicating positive market reception. Additionally, the construction of a new multipurpose plant for Animal Health in Panoli, Gujarat, is progressing as planned and is anticipated to be completed in the first half of FY24. This upcoming facility holds promising prospects for the company’s expansion and growth in the Animal Health sector.

Crop Protection sales demonstrated robust growth, increasing 22 per cent to reach ₹236 crore (₹ 194 crore). This significant growth can be attributed to the company’s efforts in exploring new opportunities, with advanced discussions underway with several global innovators.

Overall, the company’s financial performance, strategic initiatives, and expansion plans are key factors that may influence its share price. We remain ‘Bullish’ on the company, valuing it at a target price of ₹366 with a P/E of 16.5x using a forecasted EPS of ₹22 (FY25).

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