Jefferies has initiated coverage on Sai Life Sciences with a ‘Hold’ rating and set a target price of ₹730, indicating a limited upside from the current market price of ₹700.00. The brokerage acknowledges strong industry positioning and growth prospects but remains cautious due to rich valuations.
Sai Life is an innovator-focused integrated contract development and manufacturing organization (CDMO), with a differentiated business model and a strong track record compared to its peers. Favorable industry dynamics, a robust molecule pipeline featuring three potential blockbusters, and adequate manufacturing capacities are expected to drive a 15% revenue CAGR and 29% EBITDA CAGR over FY25-27.
Despite these positives, Jefferies highlights that Sai Life is trading at a high valuation of 32x/26x FY26/27 pre-Ind AS EV/EBITDA, which represents a 30% premium to its peers. Given the lofty valuations and limited near-term triggers, the brokerage sees restricted upside potential, leading to a ‘Hold’ rating on the stock.
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