Target: ₹3,200
CMP: ₹2,545.80
Ajanta Pharma (AJP) has been given a ‘Buy’ rating by analysts, initiating coverage with a target price of ₹3,200. The company’s strong performance in the high-growth branded generics (BGx) market across India, Asia, and Africa has significantly contributed to its revenue, comprising 74% of total income in FY25 and achieving a 12.5% compound annual growth rate (CAGR) from FY22 to FY25.
Forecasts indicate that AJP is expected to achieve a revenue CAGR of 13% between FY25 and FY28, propelled by an increased focus on branded formulations, expansion into new therapeutic areas, and scaling up its US generics business. In FY25, domestic formulations accounted for 32% of total revenue. The company is concentrating on four high-growth specialty therapy areas: cardiology, ophthalmology, dermatology, and pain management. Its product portfolio is significantly weighted towards chronic therapies, which contribute approximately 65% of revenue, thus ensuring retention and customer loyalty.
Over the past three years, AJP has outperformed the Indian Pharma Market (IPM) by approximately 200-300 basis points. In FY25, the company expanded its therapeutic offerings by entering nephrology and gynecology and acquired three brands in the pain management segment. New therapy introductions, market share increases, and product launches are anticipated to drive the domestic business towards a projected 13% revenue CAGR from FY25 to FY28.
Overall, AJP is expected to report EBITDA and PAT CAGRs of 17% and 16%, respectively, from FY25 to FY28, with healthy return metrics of 28.5% return on equity (RoE) and 35.6% return on capital employed (RoCE) expected by FY27. As of September FY27, AJP is trading at a price-to-earnings (P/E) ratio of 24 times and an enterprise value to EBITDA (EV/EBITDA) multiple of 17 times.
Published on September 19, 2025
