Suven Pharma reported consolidated net Profit for Q3FY25 jumped by 78% to Rs. 83.29 crore as compared to Rs 46.75 crore in the same quarter of last fiscal. The consolidated Revenue from operations stood at Rs. 307.20 crore in Q3FY25, a rise of 39.7% per cent as against Rs. 219.82 crore recorded in Q3 FY24. The company recorded an EBITDA of Rs 138 crore in Q3FY25 as against Rs 81 crore in Q3FY24. EBITDA margin for the Q3 FY25 stood at 44.9% as compared to 36.8 % in the year ago quarter.
Near-term drivers for Suven include:
- a) Healthy recovery in Suven’s Agrichem business – conversion of the segment into a strategic business unit (SBU)
- b) Strong uptick in Pharma CDMO due to visibility on shipments
B&K says “We maintain Buy rating on Suven Pharma with an unchanged target price of Rs 1,435, i.e. 52x FY27E combined entity (including NJ Bio) EPS of Rs 27.7 per share. While the stock is up 65% over the past one year, the recent correction in price of ~21% from all time highs was due to broader weaknesses across all the indices. At the current market price of Rs 1,048, the stock is trading at 47x FY26E combined entity EPS of Rs 22.2 per share and 38x FY27E combined entity EPS of Rs 27.7 per share. Post recent correction to Rs 1,048, valuations have become attractive, as Suven trades at 47x FY26E and 38x FY27E P/E and 32x/26x FY26/27E EV/EBITDA. Current valuations of 35-40x FY27E EPS estimates (at par with market leader Divi’s) remain at premium, but justified due to its prudent capital allocation towards niche complex assets that can sustain long-term earnings growth. Any more M&A could be additional re-rating for the stock.”
