Ajanta Pharma Q2 Results Review - Branded Generics Revenue Outperform Expectations: Systematix

Systematix Research Report

Ajanta Pharma Ltd. Q2 FY25 revenue was in-line, but Ebitda was below expectations due to higher selling, general and administrative and other expenses. Net Income was below expectations due to a lower other income and higher reported interest expense.

A strong quarterly performance was led by strong growth in Asia (~29% YoY) and Africa Rx business (~36% YoY). Growth in branded markets was strong and higher than expectations.

Asia, Africa and India grew 28.7%, 32% and 8.7% respectively on a YoY basis. The U.S., which de-grew 2.1% on a YoY basis, should grow in mid-single digits for FY25.

New launches and an expected stable price erosion should contribute to a meaningful growth in top-line for Ajanta Pharma supported by stable Ebitda margins.

We revise our target PE multiple to 30 times September FY27E EPS and recommend a Hold on Ajanta Pharma at current market price with a revised target price of Rs 2,859.

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