Suven Pharma soars 14% on heavy volumes; surges 43% from January low

Shares of Suven Pharmaceuticals rallied 14 per cent to Rs 1,328.20 on the BSE in Thursday’s intra-day trade amid heavy volumes on expectations of healthy business outlook. 

 

The stock price of a technology-led global Contract Development and Manufacturing Organization (CDMO) company has bounced back 43 per cent from its previous month low of Rs 929 touched on January 28, 2025. It was trading close to its record high level of Rs 1,359 touched on December 2, 2024.

 

At 02:02 pm; Suven was quoting 8 per cent higher at Rs 1,255, as compared to 0.3 per cent decline in the BSE Sensex. The average trading volumes at the counter jumped nearly three-fold with a combined 450,000 equity shares changing hands on the NSE and BSE.

 

 

In the October to December quarter (Q3FY25), on a proforma merged basis, along with Cohance, Suven reported revenue growth of 40 per cent year-on-year (YoY) at Rs 676.4 crore, in-line with previously communicated expectations of growth in H2FY25. The key growth driver, the Pharma CDMO segment reported 101 per cent YoY growth driven by R&D and BD efforts. 

 

Gross margins for the quarter stood at 71.5 per cent, against 64.6 per cent and adjusted EBITDA margins stood at 38.7 per cent, against 23.1 per cent in a year ago quarter. Consolidated profit after tax doubled to Rs 168.1 crore from Rs 83.8 crore in Q3FY24.

 

Despite a strong recovery in Q3, the overall 9-month (April to December) performance remained subdued due to earlier weak Q1 and Q2 performance.

 

The management expects to deliver YoY growth for the combined platform in FY25 on a full year basis, with acceleration expected in FY26. Suven targets to reach $1 billion revenue led by an expanding CDMO share, niche tech investments and continued strategic M&A.

 

While the stock was up 84 per cent over the past one year, the recent correction in price from all time highs was due to broader weaknesses across all the indices.

 

Suven’s capital allocation remains on right track towards niche and complex assets, highlighted by recent $ 54 million acquisition of niche oligonucleotides CMDO player Sapala Organics and $ 64 million acquisition of the US-based ADC expert NJ Bio. The merger with the group company Cohance is on track and is expected to be effective by Q1FY26, said analysts at Batlivala & Karani Securities India Private Limited.

 

Concerns on weakness in agrichem business and pricing pressure in Cohance API portfolio are largely behind. The brokerage firm said they continue to remain positive on Suven as it emerges as a strong integrated CDMO player over the longer term, with niche capabilities across differentiated tech platforms like ADC, Oligo, HiPo, SpecChem, etc. and favourable CDMO industry landscape leading to increased RFQs.

 

Meanwhile, the Indian pharmaceutical industry, especially the CRDMO segment, could be at an inflection point, believe analysts at Macquarie. Increased pharmaceutical outsourcing, coupled with regulatory tailwinds, the brokerage said, could accelerate the growth of the industry and related players in the coming years.

 

Suven Pharma is set to benefit from high-growth cutting-edge CDMO segments and its proven track record to drive traditional business. The company has a solid antibody-drug conjugate (ADC) CDMO platform and is building capabilities in the Oligonucleotide segment. The brokerage firm projects a top-line compound annual growth rate (CAGR) over FY24-FY30 in the mid-20 per cent area for Suven (pro forma for the Cohance merger).

 

“Suven Pharma boasts a robust Antibody-Drug Conjugate (ADC) platform, which is expected to drive substantial growth owing to the ADC market enjoying a 30 per cent CAGR; ramping up existing product supplies to leading innovators in the ADC segment; and the addition of payload as well as linker capabilities. Consequently, we project a 24 per cent topline CAGR for the company through FY30E from the FY24 base,” Macquarie said in a healthcare sector report.