Sharekhan has a buy call on Biocon stock with a price target of Rs 420 on the stock. “Biocon delivered a strong performance for Q4FY22 and results were in line with estimates. In addition, comments on growth prospects were also encouraging. Based on the results in line, we largely maintained our estimates for FY23E/FY24E” , the company said.
The company also has a call to buy shares in Laurus Labs with a price target of Rs 735. “Q4FY22 was a muted quarter and earnings slightly missed estimates. Modest quarterly performance and strong outlook growth, we have refined our earnings estimates for FY23/24,” the company said.
Sanofi India can rally as high as Rs 9,250, believes Sharekhan, who placed a buy call on the stock with a price target of Rs 9,250% YoY and was ahead of estimates, however, earnings decreased slightly by 2.5% year-on-year. Based on this, we have refined our estimates for CY22E/CY23E,” the company said.
Sharekhan also recommended buying Abbott India shares for a price target of Rs 22,780 on the shares. “Q4FY22 was a strong quarter with revenue and double-digit PAT growth, reflecting the strong performance of acute therapies. Results were above estimates. Based on strong growth prospects and high share acute therapies (which are some of IPM’s fastest growing), we have refined our estimates for FY23E/FY24E,” the company said.
Long-term outlook for the pharmaceutical sector
According to Sharekhan, Indian pharmaceutical companies are better positioned to exploit opportunities as they are globally competitive and have a large market share in most markets. Additionally, other factors such as 1) long-term opportunities in the US with increasing preference for specialty/complex generics (including biosimilars) and injectables, 2) expected healthy IPM growth , which is expected to grow near double-digit growth in FY2023 as well, and 3) emerging API opportunities would be key growth drivers in the medium to long term; while in the near term, US pricing pressures and cost pressures could act as headwinds, albeit transitory in nature. Collectively, this indicates strong long-term growth potential for Indian pharmaceutical companies.
“The confluence of other factors, including a focus on specialized/complex products in addition to emerging API opportunities, would be key growth drivers. Collectively, although near-term headwinds are likely to hold, the long-term growth prospects are intact and, based on this, we have a positive outlook for the sector,” the firm noted.