Antique maintains 'Buy' on Concord Biotech; sees strong API, CDMO growth

Domestic brokerage Antique Stock Broking remains positive on biopharmaceutical company Concord Biotech with a 'Buy' rating, citing multiple growth drivers, including the company's transition towards becoming a fully integrated player. 

 

According to the brokerage, the company's business model remains attractive on account of long-term client contracts, complex manufacturing process leading to higher entry barriers, leadership position in key molecules, and new growth avenues-injectable facility for formulations and CDMO opportunity-expected to drive positive operating leverage. 

 

"We met the management of Concord Biotech (CONCORDB), where they highlighted the company's growth prospects and capabilities. While near-term revenue has been volatile, this is largely timing-driven and not reflective of any loss in market share or demand," the brokerage said in its note.

 

 

Amid this, Antique expects the Concord to report revenue, Ebitda and PAT CAGR of 18 per cent, 17 per cent and 19 per cent, respectively, with margins remaining stable at around 42 per cent over FY25–28E.

 

Analysts view the current valuation as attractive and have valued the stock at 25 times FY28E earnings, arriving at a target price of ₹1,520. The target price implies a potential upside of nearly 16 per cent from the January 5, 2026, closing price of ₹1,311.5 on the NSE.

 

At 10:00 AM, shares of Concord Biotech were trading at ₹1,331.10, up by 1.8 per cent against the previous session's close. The stock touched an intraday high of ₹1,352.20 on the NSE. In comparison, the benchmark NSE Nifty 50 was quoting at 26,269.10 levels, up by 18.80 points or 0.07 per cent. Concord Biotech has a total market capitalisation of ₹13,925.46 crore.  

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Here's why Antique Stock Broking is bullish on Concord Biotech:

API - To remain a growth engine: Concord’s API segment remains its key profitability driver, with a significant portion of production used for captive consumption in its formulations business, analysts at Antique said. The brokerage estimates that the underlying API business typically grows at around 10 per cent year-on-year (Y-o-Y), supported by steady demand for immunosuppressant and oncology APIs.

 

Analysts said incremental growth could accelerate to about a 25 per cent compound annual growth rate (CAGR), aided by the addition of second-source customers and improved utilisation of the Unit-3 facility at Limbasi. Further, Unit-3 has substantial expansion headroom, with an installed capacity of 800 cubic metres that can be scaled up to 1,200 cubic metres. The unit currently generates revenue of around ₹2 billion, with potential to scale up to ₹12–13 billion over time.

 

Antique also highlighted that API margins remain structurally strong due to limited global competition, with only five to six players worldwide. Excluding Biocon and Teva, most competitors are based in emerging markets, which supports pricing power, the analysts said.

 

CDMO, injectables set for growth: Concord Biotech’s CDMO execution has slowed in recent quarters due to US market uncertainty and delays around trade and tariff clarity, which have made customers cautious on volume commitments, analysts said. However, the management expects traction to improve once these uncertainties ease, with CDMO and injectables growth likely to accelerate.

 

The company plans to tap into institutional and tender business and undertake contract manufacturing for Indian pharma players to improve capacity utilisation. On injectables, Concord has received WHO approval for its facility and plans to gradually shift from third-party to in-house manufacturing over the next two to three years. Analysts estimate the CDMO opportunity at around ₹4 billion over the next three to five years.  Disclaimer: The views or investment tips expressed by the brokerage in this article are their own and not those of the website or its management. Business Standard advises users to check with certified experts before taking any investment decisions.