ICICIdirect issued Buy call on Ajanta Pharmaceuticals (APL). The stock broker recommends buying stock for target of Rs 2,151 against current market price Rs 1,734 in its report.

Commenting on the investment rationale stock broker said," APL remains an interesting candidate from the midcap pharma space with high growth rates, strong margins, commendable return ratios and a lighter balance sheet. Defying the normal trend of targeting the developed markets for generic generics, initially, the company focused on branded generics in the semi-regulated markets." 

"At this juncture, the company is well poised to foray into the US market, especially once the newly constructed Dahej plant gets USFDA approval. We expect revenues, EBITDA and net profit to grow at a CAGR of 24%, 20% and 17%, respectively. We have ascribed a target price of Rs 2,151 based on 20x FY17E EPS of Rs 107.6," it added.

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