Shares of Neuland Laboratories Ltd continued their upward move during the trading session Wednesday and a domestic brokerage firm B&K Securities continued to remain positive on the stock and see another 25 per cent upside in the multibagger stock.
The pharma player, which is also backed by Dalal Street Veterans like Vijay Kedia and Mukul Agrawal, has been a consistent performer for the investors and has zoomed about 62 times from its covid lows around Rs 260 to Rs 16,202 on Wednesday, with its total market capitalisation nearing Rs 21,000 crore mark.
Brokerage firm B&K Securities said that approval from USFDA for COBENFY (Xanomeline and Trospium Chloride/KarXT) for Schizophrenia is a major positive for the company, which could experience substantial growth in the CMS segment as the product scales up in the US and globally. It also expects the CMS segment to maintain healthy growth ahead.
Overall, sales have grown by 29 per cent CAGR over FY22-24, while PAT has risen 117 per cent CAGR over the same period. The stellar performance has largely been led by ramp-up of the CMS division that has grown by 65 per cent CAGR over FY22-24, said B&K Securities in note.
“The change in sales mix towards the CMS segment from 30 per cent in FY22 to 49 per cent in FY24, has led to superior profitability with EBITDA margins of 29.7 per cent in FY24. The inflection point for Neuland’s CMS segment has played out after FY23 when we saw a sustainable ramp-up of top 5 molecules,” it added with a ‘buy’ rating and a target price of Rs 20,000 on the stock.
Recently, some media reports suggested that Neuland Labs clocked exports totaling $27 million for September 2024, an increase of 13 times month-over-month from August’s $2 million. This news sparked a rally in the stock which pushed it about 40 per cen in the last one week.
However, the company, in an exchange filing stated that the export data does not necessarily reflect the financials of the company for any quarter. The actual shipment of the product happens as per the requirement of the customer. Among other analysts, global brokerage firm Goldman Sachs gave it a ‘buy’ rating but its target has already been met.
Neuland Laboratories is yet to file its shareholding pattern for September 2024 quarter. As of June quarter, Mukul Mahavir Agrawal owned 4,00,000 equity shares or 3.12 per cent stake in the company, while Vijay Kedia’ Kedia Securities owned 1,40,000 equity shares or 1.09 per cent stake in the company.
