Akums Drugs saw sharp 4% rally from lows in its stock price after Citi initiated coverage with a ‘Buy’ rating and a target price of ₹700. The brokerage highlighted Akums’ competitive edge in terms of scale, manufacturing capabilities, and potential for international expansion.
The recent stock weakness has been attributed to a correction in API prices, but analysts remain optimistic about Akums’ growth trajectory. While product development revenues, which contributed around 4% of the CDMO segment in FY24, did not recur in FY25 estimates, Citi expects CDMO growth to pick up in the first half of FY26. The domestic CDMO business is projected to grow by 9% in FY26 and 12% in FY27, reinforcing confidence in the company’s long-term prospects.
As per Citi, a major boost to Akums’ international potential comes from a €200 million CDMO contract in Europe, validating its capability to scale globally. The company is currently trading at 12x and 10x its estimated EBITDA for FY26 and FY27, respectively, offering a nearly 30% discount compared to the second-largest player in the industry.
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