Ajanta Pharma shares rally 7% on strong Q3 earnings

In Q3FY21, the company’s India sales were at Rs 220 crore, up 13 percent from Rs 195 crore, while total export sales reported a growth of 17 percent at Rs 524 crore.

On the operational front, EBITDA was at Rs 242 crore as against Rs 186 crore, up 30 percent, while EBITDA margin was at 32 percent, the company said in a regulatory filing.

“Ajanta Pharma delivered higher than expected earnings, led by superior growth in the Branded Generics segment. This was further supported by a lower tax rate in 3QFY21. While the pace of ANDA filing has moderated in 9MFY21 due to COVID-related disruptions, it would improve with the easing of lockdown restrictions,” brokerage firm Motilal Oswal said.

It has raised its FY21E/FY22/FY23E estimates by 7.4%/7.1%/6.5% to factor in recovery in DF/Asia/Africa, robust ANDA pipeline, and improved capacity utilization.

Motilal Oswal remains positive on the stock given its improved outlook in the Branded Generics segment, superior growth in US Generics, aided by consistent compliance and minimal financial leverage and healthy return ratios.

The brokerage maintained a 'Buy' rating with a target price of Rs 2,030 per share.

At 11:55 am, the stock of Ajanta Pharma was trading 3.83 percent higher at Rs 1,812.95 apiece on the BSE as compared to a 0.93 percent gain in the benchmark Sensex.