Rekha Rakesh Jhunjhunwala Portfolio Multibagger Stock Concord Biotech is a good buy now

Brokerage firms are bullish about Concord Biotech. The stock has corrected nearly 30 per cent from its 52-week highs. The stock has seen some upgrades following the recent correction and growth outlook of the company management.

Concord Biotech reported a net profit of Rs 98.70 crore in September 2024 quarter, rising 16.81 per cent on a year-on-year basis. The company’s revenue from operations rose 18.23 per cent to Rs 310.2 crore, while Ebitda came in at Rs 146.70 crore, increasing 15.22 per cent, in the reported quarter.

Shares of Concord Biotech Ltd settled at Rs 1893.25 on Thursday, rising slightly above 2 per cent. The company commanded a total market capitalization of Rs 19,800 crore as of its latest close. The stock has corrected nearly 30 per cent from its 52-week high at Rs 2,658, hit on 20 September 2024.

Concord Biotech’s earnings came above expectations. The management remains committed to launching 8-10 new products in 3-4 years in oncology, anti-infectives, and anti-fungal, which are complex in nature and achieve a long-term revenue CAGR guidance of 25 per cent, said Choice Broking.

“We are optimistic on Concord because of its top-line growth at a CAGR of 25 per cent over the next 3-5 years driven by a robust pipeline; addition of new injectable facility; backward integration and low utilization levels; and ongoing encouraging momentum with the increasing queries in the CDMO segment,” it added with a ‘buy’ rating on the stock with a target price of Rs 2,208.

Rekha Rakesh Jhunjhunwala owned 25,199,240 equity shares, or 24.09 per cent stake in the company as of September 30, 2024. Her stake in the company as of November 14, 2024 stood nearly Rs 4,675 crore.

The growth in formulation business was driven by new product introduction, new customer additions, and increasing market share in both the domestic and emerging markets, said Antique Stock Broking It reiterated its high-teen revenue growth guidance and expects the API segment to deliver higher growth from H2FY25 onwards, the brokerage said.

“In FY26, Concord is likely to see a scale-up in revenue in its formulations business driven by its new injectable facility catering to India and RoW markets. We keep our estimate for FY27 largely unchanged and maintain ‘buy’ rating on the stock with a revised target price of Rs 2,187 valuing the company at a P/E multiple of 35 times on FY27 EPS (earlier 1HFY27),” it added.

Shares of Concord Biotech made its Dalal Street debut in August 2023 when the pharma player raised a total of Rs 1,551 crore via its IPO by selling its shares for Rs 741 apiece. The stock is currently trading 150 per cent higher than its issue price in the IPO.

Concord reported a strong beat in Q2FY25 led by formulations, with API growth being muted at 1 per cent YoY, owing to higher captive sales, as well as, a high base. Nevertheless, with steady pricing as well as market shares across all key molecules, Concord has reiterated its guidance of achieving 25 per cent sales CAGR over the next five years, said Kotak Institutional Equities.

“Aided by healthy underlying demand trends, market share growth in existing molecules, driven by recent capacity expansions after a few years of capacity constraints and new launches, we expect Concord to report a robust 27 per cent EPS CAGR, over FY2024-27E. Post the recent correction, we upgrade the stock to ‘add’ with fair value of Rs 2,050,” it said.