Motilal Oswal initiates with 'Buy' on Rubicon Research; check target

Motilal Oswal has initiated coverage on Rubicon Research, a pharmaceutical manufacturing company, with a 'Buy' rating

Rubicon Research share price today: Domestic brokerage Motilal Oswal Financial Services (MOFSL) has initiated coverage on Rubicon Research, a pharmaceutical manufacturing company, with a 'Buy' rating. The brokerage noted that over the past decade, the company has built a sustainable moat through full-spectrum capabilities across multiple dosage forms and a track record of successful speciality projects. Additionally, the company has developed robust manufacturing capacities, maintained a consistent compliance record in supplying to US markets, and focused on commercial success.

 

Considering a strong earnings CAGR of 43 per cent over FY25-28 and over 30 per cent RoE (adjusted for recent fresh issue), analysts at MOFSL believe Rubicon should command a premium valuation. "Rubicon scores well ahead of peers in pharma space on ROE*earnings CAGR matrix," the brokerage said. 

 

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MOFSL values Rubicon Research at a 35x multiple (30 per cent premium to the sector multiple of 27x) on 12-month forward earnings, arriving at a target price of ₹740. The target implies a 21 per cent upside from Friday's closing price of ₹609.8. 

  At 10:45 AM on Friday, the Rubicon Research stock was trading at ₹624, up over 2.3 per cent compared to the previous session's close of ₹609.8 on the NSE. The recently listed company's total market capitalisation stood at ₹10,232 crore.

Here's why Motilal Oswal holds a positive outlook on Rubicon Research:

Rubicon scales despite US generics headwinds 

MOFSL noted that despite challenges in the US generics market, including consolidation of buyers, faster ANDA approvals, increasing competition, and rising adverse inspection outcomes, Rubicon has scaled its business significantly, growing revenue from ₹390 million in FY15 to ₹12.8 billion in FY25, supported by focused R&D, streamlined manufacturing, and strong compliance. 

Scaled up portfolio with faster launches

The brokerage further highlighted that Rubicon has rapidly expanded its commercial product portfolio from 18 in FY22 to 70 by June 2025, achieving an 86.4 per cent conversion rate from approvals to launches in Q1FY26. The company’s offerings span oral solids, oral liquids, nasal sprays, and topicals, with oral solids revenue growing at a 57 per cent CAGR to ₹11 billion over FY22–25, and oral liquids scaling from ₹43 million to ₹1.3 billion. In Q1FY26, OS/OL revenue rose 7 per cent/25 per cent year-on-year (Y-o-Y) to ₹3 billion/₹355 million, while nasal spray revenue reached ₹124 million/₹80 million in FY25/Q1FY26.

 

Additionally, Rubicon’s ₹2.8 billion R&D spend over FY24–Q1FY26 supports ongoing product filings, including six ANDAs filed and six approvals in Q1FY26, underpinning strong revenue visibility through FY25–28.

 

Nasal sprays are emerging as a key growth driver for Rubicon, contributing 2.3 per cent of revenue in Q1FY26, supported by its Ambernath facility. The US nasal spray market is set to grow at a 9.5 per cent CAGR through 2030, and Rubicon stands out with four of the 25 approvals granted between CY23 and June 2025. 

Rubicon’s CNS playbook

According to MOFSL, Rubicon is expanding its CNS business with three branded products - Equetro, Raldesy, and Lopressor OS—that have no AB-rated generic competitors as of July 2025. Equetro is FDA-approved for bipolar I disorder, Raldesy offers a novel oral liquid formulation of Trazodone for depression, and Lopressor OS provides flexible dosing for heart conditions. Increased focus on marketing to drive better business prospects in this segment for Rubicon.

Enhanced focus on R&D

Rubicon’s R&D spending stands at 11 per cent of revenue, significantly higher than the industry median of 6 per cent, highlighting its strategy to develop a broad product portfolio. The company also shows strong efficiency, generating one of the highest R&D turnovers among peers, with US revenues from R&D investments made two years ago. "With FY25 US revenue nearly 6x its FY22-23 R&D expenditure, Rubicon’s disciplined product selection and development approach is delivering solid results," MOFSL said.