B&K Securities has reiterated its Buy rating on Neuland Laboratories, raising the target price to Rs 20,000 from the previous Rs 11,700, indicating a 40% upside from the current market price of Rs 14,263. The brokerage highlighted the recent USFDA approval for COBENFY and noted that Neuland is a preferred CDMO (Contract Development and Manufacturing Organization) partner.
B&K also pointed to a healthy pipeline in Neuland’s CMS (Custom Manufacturing Solutions) division, with a shift in the product mix toward more profitable CMS supplies leading to better margins. The company is expected to generate healthy free cash flow of Rs 120 crore, and management has guided for 1-2 new CMS commercial opportunities playing out in FY26.
Neuland currently trades at 33x FY26 EPS, at a discount compared to peers like Divis Laboratories and Suven Pharma.
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