Hi @Vinay_Garg – While the Xanthine derivative business does constitute a considerable portion, it is their API business that is the main revenue driver (more than 50% in FY23) for Aarti Pharmalabs. Furthermore, they have also recently focused on the CDMO business which I assume you are aware of. Thus it would be incorrect to label it as a consumer proxy.
Now coming to the question of whether it deserves a higher PE? I found it difficult to determine at this time. It is a stable business, no doubt. But one would think that the real area of interest from an investor’s POV is their nascent CDMO business. I will keep a close watch on how it matures and perhaps Mr. Market will too.
Disc – Not Invested (But on watchlist)
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