Nomura has initiated coverage on Indegene, assigning a “Neutral” rating and setting a target price of Rs 700, citing the company’s scalable business model and strong domain expertise as key strengths. Indegene, a leading provider of technology-led services to life sciences companies, is well-positioned to capitalize on the growing trend of digital adoption within the sector.
The brokerage highlights Indegene’s impressive client roster, which includes both large pharmaceutical firms and emerging players. This diverse clientele, coupled with a robust sales engine, suggests a strong potential for sustained growth as the industry increasingly embraces digital solutions.
Nomura also notes the strength of Indegene’s management team and its favorable rankings among industry analysts, which contribute to a positive outlook. The firm anticipates that Indegene will deliver a compound annual growth rate (CAGR) of 12% in USD revenue and 18% in earnings per share (EPS) over the fiscal years 2025 to 2027.
However, Nomura identifies several key risks that investors should consider. The company’s focus is primarily on the life sciences vertical, leading to significant exposure in a single sector. Additionally, there is a high concentration of revenue, with 46% coming from its top five clients. The use of $100 million in cash reserves without a clearly defined dividend policy further raises concerns. Furthermore, the trend of in-sourcing among clients could impact future revenue streams.
