Shares of this small-cap pharma stock surged 1 percent on Wednesday after reputed brokerage firm Kotak Institutional Equities set a target price indicating potential upside.
Share Price Variation
In Wednesday’s trading session, the share price of Emcure Pharmaceuticals Ltd reached an intra-day high of Rs.1,385.00 per share, rising nearly 6 percent from its previous close of Rs.1,374.20 apiece. The shares have retreated since then and currently trading at Rs.1,374.00 per share.
What happened
Kotak Institutional Equities has upgraded its rating on Emcure Pharmaceuticals’ shares from “Add” to “Buy,” while maintaining the price target at Rs.1,680, suggesting a potential upside of approximately 22 percent from the current market price.
In its report, Kotak expects Emcure’s organic growth to accelerate in the second half of the current financial year, following a “decent” first half. The firm anticipates 9 percent organic growth in the second half, up from 6 percent in the first half. Emcure’s growth will be supported by positive prospects in key markets, including India, Canada, and the Rest of the World.
Additionally, Kotak believes that Emcure’s organic growth, combined with an in-licensing deal with Sanofi, the consolidation of Mantra, and the resolution of most of its legal challenges, will result in a 13 percent Compounded Annual Growth Rate (CAGR) for sales from financial year 2024 to 2027.
Kotak projects Emcure’s Earnings Before Interest, Tax, Depreciation, and Amortisation (EBITDA) and Earnings Per Share (EPS) to grow at CAGRs of 18 percent and 29 percent, respectively, over the same period. This growth is expected to be driven by improved productivity and higher utilization of the company’s new facilities.
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Financial Performance
Emcure Pharmaceuticals Ltd’s stock price saw a significant rise, driven by strong financial performance and revenue growth. For Q2 FY25, the company posted consolidated revenue of Rs.2,002 crores, marking a 20.38 percent increase from Rs.1,663 crores in Q2 FY24 and a 10.3 percent growth from Rs.1,815 crores in Q1 FY25.
Profit After Tax (PAT) surged 38 percent year-over-year to Rs.202 crores, compared to Rs.146 crores in the same quarter last year, and rose 32 percent from Rs.153 crores in Q1 FY25.
Shareholding Pattern
As of September 2024, Emcure Pharmaceuticals Ltd.’s shareholding pattern indicates that the promoters hold a dominant stake of 78.08 percent. Retail investors own 15.05 percent, while Foreign Institutional Investors and Domestic Institutional Investors hold 2.91 percent and 3.96 percent, respectively. Namita Thapar, a prominent figure from Shark Tank India, holds a 2.68 percent stake in the company.
Company Profile
Emcure Pharmaceuticals Ltd. (EPL) is a leading Indian pharma company headquartered in Pune engaged in developing, manufacturing, and globally marketing a broad range of pharmaceutical products. Emcure is an R&D-driven company that develops and manufactures a wide range of differentiated pharmaceutical products
Written by – Siddesh S Raskar
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