Macquarie has initiated coverage on India’s contract research, development, and manufacturing organization (CRDMO) sector, highlighting secular growth trends and regulatory tailwinds that are set to drive long-term expansion. The brokerage has issued Outperform (O-P) ratings on Divi’s Laboratories, Suven Pharma, Blue Jet Healthcare, and Syngene International, citing their strong positions in the high-growth CRDMO industry.
According to Macquarie, India’s CRDMO space is witnessing increased demand due to biotech funding recovery, global supply chain diversification, and increased pharma outsourcing. The brokerage sees significant earnings potential for key players as they continue to expand capacity and move up the value chain.
Syngene International: Strong positioning amid biotech recovery
Macquarie has initiated an Outperform rating on Syngene International, setting a target price of ₹835. The brokerage believes that Syngene is uniquely positioned to benefit from the recovery in biotech funding and the shift toward supply chain de-risking.
Macquarie expects significant earnings growth for Syngene in the medium term, as its enhanced capabilities and capacity expansion are likely to drive higher utilization and revenue growth. The company’s long-term contracts and diversified customer base further bolster its growth prospects.
Blue Jet Healthcare: Rapid growth in contrast media and CDMO
Blue Jet Healthcare has received an Outperform rating, with a target price of ₹1,000. The brokerage highlights the company’s rapid ascent in the contrast media business, a high-growth pharmaceutical segment used in medical imaging.
Macquarie expects Blue Jet’s pharma CDMO business to expand significantly, fueled by the ramp-up of existing molecules and the addition of new molecules to its pipeline. The company’s strong global partnerships and increasing focus on value-added products are likely to drive robust top-line and bottom-line growth in the coming years.
Suven Pharma: Expanding in high-growth CDMO segments
Suven Pharma has been rated Outperform, with a target price of ₹1,500. Macquarie sees Suven as a key beneficiary in high-growth cutting-edge CDMO segments, given its proven track record in traditional CDMO businesses.
The brokerage is particularly bullish on Suven’s solid antibody-drug conjugate (ADC) platform and its expansion into oligonucleotide manufacturing, both of which are fast-growing areas in the pharma outsourcing space. These developments are expected to support long-term revenue expansion and profitability.
Divi’s Laboratories: India’s largest CDMO firm set for exponential growth
Macquarie has initiated coverage on Divi’s Labs with an Outperform rating and a target price of ₹7,400, citing its dominant position in the Indian CRDMO industry.
Divi’s works with most of the world’s top 20 pharma innovators in the small-molecule space, making it a crucial partner in the global pharmaceutical supply chain. The brokerage forecasts that Divi’s custom synthesis business is on track for a significant expansion, with revenue expected to triple by FY30, while its bottom-line could grow fourfold.
CRDMO sector outlook: Strong tailwinds to drive long-term growth
Macquarie’s bullish stance on India’s CRDMO sector is driven by increasing demand for outsourcing in drug development, as global pharmaceutical companies look to enhance efficiency and reduce costs. With rising regulatory scrutiny on China, India is emerging as a preferred CRDMO hub, benefiting players like Divi’s Labs, Suven Pharma, Blue Jet Healthcare, and Syngene.
Overall, Macquarie’s coverage suggests long-term structural growth opportunities for Indian CRDMO firms, with strong earnings potential over the next five years.
