Analyst at ICICI Direct has recommended ‘Buy’ on the stock with a price target of ₹1,950. “Margins are likely to improve amid operational leverage, expected softening of raw material cost and incremental focus on branded business. Calculated focus, healthy margins, return profile and lighter balance sheet are some key differentiators for Ajanta. Return ratios are expected to reach 25% levels (ROIC even higher). We value Ajanta Pharma at Rs 1950 based on 27x FY25E P/E multiple,” it says in a report.

Nirmal Bang Securities has maintained ‘Buy’ on Ajanta Pharma with a revised target price of ₹1,800. "We remain positive on Ajanta Pharma given its branded play and a strong focus on the domestic market. We maintain BUY on Ajanta Pharma with a revised target price (TP) of Rs 1,800, valuing it at 24x on June 25E earnings," the brokerage says in a report.

Another brokerage Motilal Oswal Financial Services has also maintained a 'Buy' call on the stock with a target price of ₹1,800 and raised the earnings estimates for FY24/FY25 by 7.5% each. “We expect 23% earnings CAGR over FY23-25, led by 15% sales CAGR in Domestic Formulation (DF)/Asia and 13% sales CAGR in the US segment, supported by 370bp margin expansion. Considering the earnings outlook and attractive valuation,” MOFSL says in a note.

Nuvama has also reaffirmed ‘Buy’ with a target price of ₹1,850 based on Q1FY26E. “We believe a 24.3% EBITDA margin for FY24 could grow to 26.4% by FY26. We keep FY24E/25E largely unchanged but increase the multiple to 25x (from 20x) due to margin expansion visibility,” it says.

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Ajanta Pharma Ltd

Ajanta Pharma hits all-time high on strong Q1; surges 55% in 9 months