Target: ₹1,350

CMP: ₹1081.15

Suven Pharma is primarily engaged in the development and manufacturing of NCE-based KSMs, bulk drugs/ intermediates for human health as well as specialty chemicals under contract research and manufacturing services for global pharma, biotechnology and chemical companies.

Following a tepid FY24/25E due to the impact of one-off revenue base and inventory destocking issues at Suven’s top customers, we expect a strong rebound and structural growth starting in FY26E driven by: Continued traction in top 3-5 drugs (Empagliflozin, Finerenone, ADCs); Potential approval of new drugs/ indications (Zongertinib, Nerandomilast, etc.); successful integration of Cohance, Sapala and NJ Bio; and Turnaround in the AgChem macros.

Our detailed product analysis of the key CDMO and AgChem products using the IQVIA and EXIM database gives us comfort around the near- to medium-term growth prospects of the business

Accordingly, we expect the combined entity’s EBITDA to compound at over 20 per cent CAGR organically over the medium term. We initiate at Buy with a 12m TP of ₹1,350.

Catalysts: Continued traction in key products, new approvals, successful integration.

Key risks: Product/customer/ geography concentration risk, challenges to new management’s integration, regulatory compliance

Published on April 8, 2025