Top Broking Houses Placed "Buy" On 2 Midcap Pharma Stocks, Shares Can Surge Upto 24%

Leading broking houses Motilal Oswal & Sharekhan has come up with a "Buy" recommendation on two midcap pharma stocks, namely Abbott India Ltd. and Ajanta Pharma Ltd. The brokerage claims a potential upside of up to 24% if you buy them today. Check below to know more:

1. Ajanta Pharma Ltd.

Stock's Current Market Price, Returns, 52 Week Low/High, Potential Upside, Target Price

Motilal Oswal has assigned a "Buy" on the stock of Ajanta Pharma with a target price of Rs 1,410/share. Shares are likely to give up to 18% return if purchased today. The stock is currently trading at Rs 1,205.40/share. It has a market capitalisation of Rs 15,447.41 crore.

Its 52 week low is Rs 1,111.60/share and 52 week high is Rs 2,010/share, respectively. It has given 1.93% negative return in the past 1 week. The stock gained 1.48% in the past 1 year, 42.48% in the past 3 years, and 30.77% in the past 5 years, respectively.

Buy the Stock for a target price of Rs 1,410/share

According to Motilal Oswal, The overall investments in terms of field force additions in Asia/Africa and manufacturing capacity expansion to cater to focus markets are already in place. Further, the cost pressures are likely to ease from FY24 onwards. AJP has cash to the tune of INR6b for inorganic growth opportunities. "Further, AJP is trading at 20x FY24E EPS of INR60 and 17x FY25E EPS of INR69. We continue to value AJP at 22x 12M forward earnings to arrive at our TP of INR1,410. Maintain BUY," the brokerage has said.

2. Abbott India Ltd.

Stock's Current Market Price, Returns, 52 Week Low/High, Potential Upside, Target Price

Sharekhan has assigned a "Buy" on the stock of Abbott India with a target price of Rs 25,243/share. According to the given target price and the CMP of the stock, it can fetch up to 24% return. The stock is currently trading at Rs 20,463.55/share. It has a market capitalisation of Rs 43,494.35 crore.

Its 52 week low is Rs 15,870/share and 52 week high is Rs 22,499/share, respectively. The stock has fallen 0.72% in the past 1 week. However, it has gained 18.96% in the past 1 year, and 36.68% in the past 3 years, respectively. Whereas, in the past 5 years, it has given a robust 268.07% return in the past 5 years.

Buy the Stock for a target price of Rs 25,243/share

According to sharekhan, Abbott India's strong market leadership in its focused therapy areas such as Gastro and women's health continue to reflect in its lead indicating India sales numbers as well (as reported by AIOCD). The company has been beating IPM growth, consistently over several months, under observation.

"The average sales for Abbott India in Q4FY23E (January and February 2023), confirms our Q4FY23E revenue growth estimate for it. We, hence, maintain the sales growth estimate at an 11.5% CAGR and earnings estimate at 16.9% CAGR over FY2022-FY2025E, respectively. At CMP, the stock trades at a reasonable levels of 38.3x/33.7x its FY24E/FY25E EPS, respectively. We continue to value it at a PE of 42x (a 15% discount to its historical average) its unchanged FY2025 EPS estimate and maintain the PT at Rs. 25,243 and the Buy rating on it. Healthy growth prospects besides a strong and debt-free balance sheet and a strong dividend payout continue to be the key positives," Skharekhan said.

Disclaimer

The stocks have been picked from the brokerage reports. Greynium Information Technologies, the Author, and the respective Brokerage house are not liable for any losses caused as a result of decisions based on the article. Goodreturns.in advises users to consult with certified experts before making any investment decision.