Emcure Pharma shares gain as JM Financial initiates coverage; check target

JM Financial initiated coverage on Emcure Pharma with a 'Buy' rating and a target price of ₹1,740, citing its growth prospects

Shares of Emcure Pharmaceuticals rose nearly 4 per cent after JM Financial initiated 'Buy' coverage on the stock, citing its "comeback trail" with strong revenue and profit projections. 

 

The brokerage assigned a target price of ₹1,740 per share, implying an upside of 27 per cent from their previous (Friday) close. 

 

Despite recent underperformance, the company is positioned for strong growth over the next 2-3 years, JM Financial said, projecting 13 per cent revenue growth, 21 per cent Ebitda and 29 per cent profit growth. This is likely to be driven by domestic recovery and sustained export expansion.

 

This makes Emcure a standout earnings growth story among peers, analysts at JM Financial said, adding that improving medical representative productivity and cost optimisation is expected to yield approximately 150 basis points (bps) of annual margin expansion. 

 

 

As the Indian pharmaceutical market transitions from mass-market generics to more novel therapies, JM Financial believes Emcure presents an attractive opportunity for investors seeking exposure to a mid-sized, India-focused player capable of outpacing industry growth.  

Emcure eyes 10-12% growth in India business 

The pharma major is aiming for 10-12 per cent annual growth in its India business over the next three years, as it rebounds from earlier challenges related to competition and internal restructuring, JM Financial said. The revival is being driven by improving volumes and the successful rollout of new products.

 

The company has expanded its women's healthcare portfolio with new launches targeting menopause and polycystic ovary syndrome (PCOS). It is also leveraging synergies from the integration of Sanofi's portfolio to strengthen its presence in diabetes and cardiac care segments.

 

In addition, Emcure has bolstered its high-barrier cosmetic dermatology division with a new leadership hire, the brokerage said. Looking ahead, growth is expected to be further supported by upcoming launches in GLP-1 therapies, ophthalmology, consumer wellness, and central nervous system (CNS) treatments.

 

Improved volume growth in its existing portfolio and a higher contribution from new products is expected to help the company achieve early double-digit growth in India over FY25-28, it added. 

 

Emcure is also strengthening its global footprint, with exports accounting for 54 per cent of total sales, JM Financial said. While growth in Europe is expected to remain in the single digits due to market maturity, Canada and emerging markets are projected to deliver strong double-digit growth.  

Emcure share price movement

The pharma major's stock rose as much as 3.8 per cent during the day to ₹1,416 per share, the biggest intraday fall since July 22 this year. The stock pared gains to trade 3.5 per cent higher at ₹1,413 apiece, compared to a 0.47 per cent advance in Nifty 50 as of 12:25 PM. 

 

Shares of the company snapped a two-day losing streak and currently trade at 0.2 times the average 30-day trading volume, according to Bloomberg. The counter has fallen 2.4 per cent this year, compared to a 4.4 per cent advance in the benchmark Nifty 50. Emcure Pharma has a total market capitalisation of ₹26,786.06 crore.