Ajanta Pharma Q2FY15 – Hold: Nirmal Bang

We have factored in 21% growth with 30.2% EBITDA for FY15 (against 32% margins in 1HFY15), on constant currency. The company has healthy balance sheet (debt:equity is 0.1x) and strong return ratios (more than 30%). The stock has re-rated substantially in last three years and considering the growth momentum and improving profitability, we believe that it can sustain at these valuations. We are introducing FY17E numbers and rolling forward our target multiple to FY17E. Given the continuous outperformance, healthy outlook, investors can hold shares for price target of Rs 2150 (18x of FY17E EPS)

Ajanta Pharma Q2FY15 RU