Jefferies highlights CY25 as a critical year for contract development and manufacturing organization (CDMO) players, with significant focus on earnings performance and market dynamics.
Key Insights:
- Earnings Growth: Strong earnings growth is expected in the CDMO space, but potential slippages could affect the high valuations in this sector.
- Market Triggers:
- US policy changes, including the Biosecure Act.
- Shifts in biotech funding trends, which will play a pivotal role in determining the sector’s outlook.
Jefferies’ Recommendations:
- Piramal Pharma:
- Maintain Buy with a revised target price of ₹310 (up from ₹260).
- Continues to be Jefferies’ top pick in the CDMO space.
- Syngene International:
- Upgraded to Hold from Underweight.
- Target price revised to ₹890 (from ₹740).
- Gland Pharma:
- Downgraded to Underweight from Hold.
- Target price cut to ₹1,630 (from ₹1,840).
- Laurus Labs:
- Maintain Underweight with a target price of ₹450 (up from ₹300).
Outlook:
Jefferies remains selective, favoring companies like Piramal Pharma with strong fundamentals and growth drivers. However, cautiousness is advised in the face of valuation concerns and external market uncertainties.
Disclaimer: This article is for informational purposes only. Please consult a financial advisor before making investment decisions.
