Buy Suven Pharma, target price Rs 575: ICICI Direct

Buy Suven Pharma, target price Rs 575:  ICICI Direct

ICICI Direct has buy call on Suven Pharma with a target price of Rs 575. The current market price of Suven Pharmaceuticals Ltd. is Rs 477.85.

Suven Pharmaceuticals Ltd., incorporated in the year 2018, is a Small Cap company (having a market cap of Rs 12453.32 Crore) operating in Pharmaceuticals sector.

For the quarter ended 31-12-2020, the company reported a Consolidated sales of Rs 274.93 Crore, up 15.82 % from last quarter Sales of Rs 237.39 Crore and up 53.85 % from last year same quarter Sales of Rs 178.71 Crore Company reported net profit after tax of Rs 97.63 Crore in latest quarter.

Investment Rationale
Suven reported an exemplary quarterly performance that was above I-direct estimates on all fronts. Despite pandemic and high base, it has guided 15-20% growth based on strong order book position (albeit some expected delays). Regarding the optically high capex plan of Rs 600 crore for modernisation, technology upgradation, the brokerage believes this has to do with the need to cater to the changed priorities and requirements at the behest of the clients, the benefits of which may be visible in the long run. It continues to emphasise on the strong execution capability and focused approach without the burden of success/failure of the innovative pipeline.

Promoter/FII Holdings
Promoters held 59.99 per cent stake in the company as of March 2020, while FIIs held 4.24 per cent, DIIs 3.96 per cent and public and others 31.81 per cent.

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