Jefferies has initiated 'buy' on both Gland Pharma and Laurus Labs with a target price of Rs 4,566 and Rs 628 respectively.

According to Jefferies, these are top picks across the 5 contract research organisation (CRO) and contract development and manufacturing organisations (CDMO) that it covers; the other 3 are Divis Laboratories, Syngene International Piramal Enterprises

For Gland Pharma, Jefferies said that it’s a dominant player in the generic injectable manufacturing space. It valued Gland at around 36.5 times FY24 estimated earnings per share (EPS) which is in line with the historical one year forward from 37 times.

Also Read: Constructive on pharma sector from FY23 onwards: Axis Capital’s Prakash Agarwal

Laurus Labs, according to Jefferies, has proven its active pharmaceutical ingredient (API) capabilities and is helpful in the CRO/CDMO space. It is de-risking its reliance on ARVs which is antiretroviral space and is embarking on a new journey. It has assigned 21.5 times FY24 estimated EPS to Laurus versus its historical average of around 20 times.

Also Read: Gland Pharma, Laurus Labs, other pharma, healthcare stocks rally; here’s why

Watch the accompanying video of CNBC-TV18’s Ekta Batra for more details

First Published:Jan 5, 2022 5:10 PM IST