Motilal Oswal, a domestic brokerage house, initiated coverage on Shaily Engineering Plastics with a ‘Buy’ rating and a target price of Rs 3,404. The brokerage believes the stock could deliver nearly 26% upside from current levels. This is driven by growth in its healthcare business, rising opportunities in insulin and GLP-1 injection pens, and improving profitability.

As per Motilal Oswal report, the company is no longer just a traditional plastic components manufacturer. Instead, it is gradually positioning itself as a specialised high-precision engineering and healthcare solutions player with exposure to some of the fastest-growing segments globally.

Motilal Oswal stated, “We initiate coverage on Shaily Engineering Plastics with a ‘Buy’ rating and a target price of Rs 3,404.”

Let’s take a look at the key reasons why the brokerage house is bullish on this stock and the rationale behind it –

From plastic components to high-growth healthcare manufacturing

Shaily Engineering Plastics has been operating for nearly four decades and manufactures precision plastic products across healthcare, consumer goods, personal care, appliances, automotive and lighting segments.

The company supplies components to several global companies including IKEA, Unilever, Procter & Gamble, Gillette and General Electric.

However, according to the brokerage report, the biggest transformation is happening inside the company’s healthcare division.

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Motilal Oswal noted that Shaily is now among a limited number of global companies specialising in complex injection delivery devices such as insulin pens and GLP-1 pens used for diabetes and obesity treatment.

The report stated, “It is also among select global players specializing in complex products such as IP-led insulin and GLP-1 pens.”

GLP-1 opportunity could become the biggest earnings driver

One of the biggest triggers for the company is the expiry of semaglutide patents in several emerging markets during March 2026.

Semaglutide is a key ingredient used in blockbuster diabetes and weight-loss drugs globally. Following patent expiry in markets like India, Brazil and Canada, generic pharmaceutical companies are now expected to launch lower-cost versions.

As per the Motilal Oswal report, this creates a major opportunity for Shaily because many pharmaceutical companies require specialised injection delivery devices for these drugs.

Motilal Oswal stated, “In most GLP-1 engagements, SHEP has been selected as the sole device supplier.”

According to the report, the company plans to invest more than Rs 600 crore for this expansion.

Healthcare business may completely reshape revenue mix

The brokerage expects healthcare to become the company’s dominant business over the next few years.

According to Motilal Oswal, healthcare segment revenue could reach nearly Rs 880 crore by FY28, growing at almost 50% Compound Annual Growth Rate (CAGR) between FY26 and FY28.

The report added that healthcare could contribute more than 50% of the company’s overall revenue by FY28 compared to nearly 10% earlier.

Motilal Oswal stated, “This high-margin segment revenue is expected to be Rs 880 crore by FY28E at 50% CAGR.”

Consumer electronics and semiconductor opportunities emerge

Apart from healthcare, the company is also exploring opportunities in consumer electronics and semiconductor component manufacturing.

While the management has not yet shared detailed expansion plans, Motilal Oswal believes this could become another long-term growth area.

The report stated, “Consumer electronics and semiconductors are optionality plays.”

Motilal Oswal report added, Shaily’s expertise in niche and complex plastic engineering products could help it enter specialised component supply chains linked to electronics manufacturing.

The company is also planning a Rs 500 crore fundraising exercise, which may support future expansion opportunities.

Strong financial outlook but valuation risks remain

Shaily Engineering Plastics has reported a strong financial growth during FY26.

As per the report, the company recorded 26% year-on-year revenue growth, while Earnings Before Interest, Taxes, Depreciation and Amortisation (EBITDA) and Profit After Tax (PAT) rose 59% and 82%, respectively.

EBITDA margin also expanded sharply to 28.2% during FY26 from 22.4% in the previous year.

Motilal Oswal expects the momentum to continue over the next two years, supported mainly by healthcare volumes and improving operating leverage.

However, the brokerage also cautioned that valuations have already risen significantly.

The report stated, “Any large miss could lead to a de-rating in the scrip’s valuation.”

Disclaimer: Investment recommendations, target prices, and specific stock ratings carry inherent market risks. This analysis is based on a brokerage report by Motilal Oswal and should be viewed for informational purposes only; it does not constitute direct financial advice, an offer, or a solicitation to buy or sell securities. Investors should conduct independent research or consult a SEBI-registered financial advisor to assess suitability before making any investment decisions. This disclaimer has been generated using AI to support user well-being and responsible content consumption.