Motilal Oswal Recommends To ‘Buy’ This Pharma Stock For +30% Upside, While The Equity Market Is Down For Omicron Coronavirus

Target Price

The Current Market Price (CMP) of Solara Active Pharma is Rs. 1169. The brokerage firm, Motilal Oswal has estimated a Target Price for the stock at Rs. 1520. Hence the stock is expected to give a 30% return, in a Target Period of 1 year.

Company performance

The company’s sales stood at Rs. 16.2 b, in FY 2021, and Motilal Oswal is expecting Rs. 23.6 b sales in FY22 and Rs. 27.5 b sales in FY 23. on the other hand, adjusted PAT was Rs. 2.2 b in FY 21; the firm is anticipating Rs. 3.6 b PAT in FY 22, and a Rs. 4.5 b PAT in FY 23. On account of reduced demand, Ibuprofen prices had corrected by 20-25% over the past 5-6 months, affecting the operating margins from this product. However, prices at the API level are now stable.

Comments by Motilal Oswal

Maintaining a buy rating Motilal Oswal said, “SOLARA is progressing well on building a niche product pipeline and broadening its presence in the regulated and ROW markets.” The brokerage firm added, “Additionally, SOLARA is progressing well on ramping up the production of Isobutyl Benzene, a key RM used in the manufacturing of Ibuprofen. This would offset the drop in profitability, to some extent, over the near-to#medium term.”

About the company

Solara Active Pharma Sciences is a dynamic, entrepreneurial, and customer-oriented API manufacturer. They have 140+ scientists working at their 2 R&D Centers, and 5 API manufacturing facilities armed with global approvals and 2 dedicated R&D facilities.

Disclaimer

The above stock was picked from the brokerage report of Motilal Oswal. Investing in equities poses a risk of financial losses. Investors must therefore exercise due caution. Greynium Information Technologies, the author, and the brokerage house are not liable for any losses caused as a result of decisions based on the article.