Ajanta Pharma shares up 3% as Biocon tie-up fuels long-term growth optimism

Ajanta Pharma shares gained 3% despite a weak market as analysts turned bullish on its Biocon partnership, semaglutide opportunity, and growth outlook

Ajanta Pharma share price edged higher in a weak market on Tuesday, December 30, amid sustained bullish bets from brokerages. The stock of the pharmaceutical company rallied 3.2 per cent on the BSE, hitting an intraday high of ₹2,773.85 per share. 

By comparison, the BSE Sensex index was down 27 points (0.03 per cent) at 10:50 AM.

  According to analysts, Ajanta Pharma has steadily built a reputation as a differentiated branded-generics player with a strong presence in India, Asia, Africa, and select emerging markets. And now, the company’s latest strategic partnership with Biocon is set to add a new dimension to its growth story, strengthening its portfolio in complex and specialty therapies while reinforcing its long-term investment appeal.

 

 

Ajanta Pharma-Biocon partnership

Recently, Ajanta Pharma entered into a strategic partnership with Biocon to source semaglutide for 23 target countries, and semi-exclusive rights in Africa, the Middle East, and Central Asia, marking a meaningful step toward introducing newer therapies in these markets. 

Analysts note that Ajanta has historically demonstrated strong execution in brand building, with industry-leading return ratios and consistent cash generation. By adding Biocon’s differentiated offerings to its portfolio, Ajanta can deepen its presence in therapies where entry barriers are higher and competition is more rational, thereby supporting sustainable margin profiles.

  According to PL Capital, this collaboration is strategically well aligned with Ajanta’s core competencies, as it allows the company to expand its addressable market without materially increasing fixed costs or execution risk.

  The company, it said, has been a pioneer in introducing field force in some of these markets. The partnership, thus, will aid Ajanta Pharma to garner higher market share for semaglutide, it said.

  Back home, the deal will help Ajanta commercialise select Biocon products in India, leveraging its established front-end strength, extensive doctor reach, and deep penetration across chronic therapy segments.

 

Ajanta Pharma’s two-pronged growth approach

Analysts believe Ajanta Pharma’s partnership with Biocon underscores its focus on two growth levers: adding geographies with larger market sizes to further widen its presence, and enhancing its product offerings within existing markets. 

Motilal Oswal Financial Services pointed out that AJP is scaling its execution bandwidth via 5-6 per cent annual MR addition on its strong base of 2,000, while also entering newer and structurally larger geographies to support the next phase of growth.

  “In parallel, the portfolio is being transitioned from an acute-led portfolio to a more chronic-centric franchise, improving revenue durability, visibility, and thereby structurally upgrading the quality of growth,” the brokerage said.

  All of this, MOFSL said, should structurally improve the sustainability of margins by diversifying the revenue base. Further, deeper penetration into existing therapies through new product launches should continue to drive incremental growth.

 

Notably, the pharma company continues to prioritise branded generics in India, which now account for a significant share of revenues and offer superior pricing power and predictability compared with commoditised export markets. Ajanta’s focus on chronic therapies such as cardiology, ophthalmology, dermatology, and gastroenterology is expected to underpin steady volume growth, aided by increasing healthcare awareness and rising per capita income, analysts said.

  On the international front, brokerages point out that Ajanta’s Africa and Asia businesses remain resilient, supported by strong brand equity and a diversified product mix. While regulatory and pricing pressures persist in some markets, analysts believe Ajanta’s limited exposure to the highly competitive US generics space reduces earnings volatility and enhances the quality of cash flows.

 

Earnings outlook & Investment strategy

At present, semaglutide’s addressable market stands at $35–45million across 26 countries (innovator-led), which is expected to expand 10–20x over the next 2–3 years with the entry of generic players. PL Capital, thus, expects AJP to garner ₹200 crore of sales in FY28E with healthy margins from semaglutide franchise across RoW markets. 

MOFSL, meanwhile, said the benefits of initiatives undertaken in the current financial year (FY26) should begin to accrue meaningfully in FY27, driving 20 per cent Y-o-Y earnings growth.

  “We have not yet factored in any semaglutide-related upside in FY28 earnings. However, given the considerable scope of demand expansion and AJP’s robust franchise, the sales traction can be decent despite generics-led price erosion in Semaglutide across markets post-patent expiry,” it said.

  The brokerage estimates AJP’s potential sales from semaglutide in Asia and Africa at $25-30 million on an annualized basis in H2FY28. “Assuming a gross margin of 70 per cent and limited additional operating costs, the Ebitda margin of this product should be at 50-55 per cent, driving additional Ebitda for AJP,” it said with a ‘Buy’ rating and a share price target of ₹3,145.

  “Overall, we expect Ajanta’s Ebitda and net profit CAGR of 17 per cent and 14 per cent over FY25-28E with healthy RoE/RoCE of 28.1 per cent/35.5 per cent in FY27E,” PL Capital said with a ‘Buy’ rating and a target price of ₹3,200.