Accumulate Suven Pharmaceuticals, target price Rs 602: Geojit Financial Services

Geojit Financial Services has accumulate call on Suven Pharmaceuticals Ltd. with a target price of Rs 602. The current market price of Suven Pharmaceuticals Ltd. is Rs 515.7 Time period given by analyst is year when Suven Pharmaceuticals Ltd. price can reach defined target.

Suven Pharmaceuticals Ltd., incorporated in the year 2018, is a Small Cap company (having a market cap of Rs 13256.47 Crore) operating in Pharmaceuticals sector.

Suven Pharmaceuticals Ltd. key Products/Revenue Segments include Pharmaceuticals, Sale of services, Duty Drawback and Export Incentives for the year ending 31-Mar-2021.

Financials
For the quarter ended 31-03-2022, the company has reported a Consolidated Total Income of Rs 380.72 Crore, down -16.56 % from last quarter Total Income of Rs 456.27 Crore and up 45.06 % from last year same quarter Total Income of Rs 262.46 Crore. Company has reported net profit after tax of Rs 91.67 Crore in latest quarter.

Investment Rationale:
Suven Pharma’s total revenues grew 40% YoY to Rs.364 crore with the Formulations and CRAMS (pharma) reporting stellar growth this quarter on a YoY basis. Specialty chemicals reported growth of 24% in Q4FY22 (YoY) while registering a 51% growth in FY22. As result, EBITDA grew by 68% YoY despite elevated employee cost and raw material expenses.

Cost of raw materials was up 10% on account of input cost inflation and supply chain constraints. However, despite the cost pressure and higher tax rate, Suven Pharma reported a PAT of Rs.92crwith 10% YoY growth. On a sequential basis, net profit was down –43% QoQ. Suven Pharma has a strong balance sheet with debt equity ratio of 0.02 as of March 2022.

Promoter/FII Holdings
Promoters held 60.0 per cent stake in the company as of 31-Mar-2022, while FIIs owned 8.56 per cent, DIIs 6.56 per cent.