Motilal Oswal maintained its Buy rating on Ajanta Pharma, and kept the target price unchanged at Rs 3,145, implying an upside of 17% from the current market price. The brokerage house recently met with the management of the company and highlighted that the focus is on adding new geographies and enhancing product offerings.
Motilal Oswal on Ajanta Pharma: Entering new markets, rejigging portfolio
Ajanta Pharma is scaling its execution bandwidth via 5-6% annual MR addition on its strong base of 2,000, while also entering newer and structurally larger geographies to support the next phase of growth.
Emerging markets are evolving into a scalable growth platform, fueled by a consistent flow of new product launches, the addition of therapies, a strategic increase in the field force, and the exploration of larger Total Addressable Markets.
In parallel, the portfolio is being transitioned from an acute-led portfolio to a more chronic-centric franchise, improving revenue durability, visibility, and thereby structurally upgrading the quality of growth, said Motilal Oswal.
Motilal Oswal on Ajanta Pharma: Outperformed industry
In India, incremental therapies are supported by the medical representative (MR) footprint continues to drive 25-30% outperformance compared to the industry. While certain therapies, such as Ophthalmology, have faced pressure due to adverse seasonality and heightened competition. However, Analysts of Motilal Oswal said that Ajanta Pharma still managed to outperform the Indian Pharmaceutical Market (IPM) by 100-200 basis points over the past 12 months.
Motilal Oswal on Ajanta Pharma: Collaboration might be next growth engine
Ajanta Pharma is pursuing an asset-light, marketing-led model and will source semaglutide from Biocon under an in-licensing arrangement. The company has exclusive or semi-exclusive marketing rights across 23 countries in Africa and three countries in the Middle East and Central Asia. With patents expiring in March 2026 and approvals expected between late 2026 and early 2027, this structure enables Ajanta Pharma to capture upside without assuming manufacturing risk.
Motilal Oswal on Ajanta Pharma: Moderate earnings growth
However, the expectations are that Ajanta Pharma’s earnings to grow at a moderate rate of 11% year-over-year in FY26. This comes after posting a strong 23% earnings CAGR over FY23-25. The analysts at Motilal Oswal said that Ajanta Pharma has entered a consolidation phase in FY26 due to incremental investments in MRs for both base and newer therapies.
“That said, the benefits of initiatives undertaken in FY26 should begin to accrue meaningfully in FY27, driving 20% YoY earnings growth. We have not yet factored in any semaglutide-related upside in FY28 earnings,” said Motilal Oswal in a research note.
Given the considerable scope of demand expansion and the company’s robust franchise, the sales traction can be decent despite generics-led price erosion in Semaglutide across markets post-patent expiry.
Disclaimer: This article provides factual analysis only and is not, and should not be construed as, an offer, solicitation, or recommendation to buy or sell securities. Investors must conduct their own independent due diligence and seek advice from a SEBI-registered financial advisor.