This Drugmaker’s Stock Can Gain Nearly 50% In 2018, Brokerages Say
Tablets move along a conveyor on the production line (Photographer: Dhiraj Singh/Bloomberg)

This Drugmaker’s Stock Can Gain Nearly 50% In 2018, Brokerages Say

Shares of the Hyderabad-based Neuland Laboratories Ltd. have the potential to gain almost 50 percent this year. That's according to analysts tracked by Bloomberg.

The drugmaker, which specialises in bulk drugs and intermediates, has a market capitalisation of Rs 781 crore and a consensus target price of Rs 1,312.5, Bloomberg data showed. It rose as much as 2 percent to Rs 893 apiece on the BSE in early trade.

It’s among 221 stocks tracked by at least four but less than 10 analysts, according to Bloomberg data. Of the five research houses covering Neuland, three have a 'Buy' rating and the remaining two recommend a ‘Hold’ and ‘Sell’ each.

This Drugmaker’s Stock Can Gain Nearly 50% In 2018, Brokerages Say

The drugmaker reported a net profit of Rs 4.9 crore in the first half of the year to March 2018 compared with Rs 32.8 crore in the entire previous year.

This Drugmaker’s Stock Can Gain Nearly 50% In 2018, Brokerages Say

Here’s what brokerages are saying about Neuland Laboratories

Dolat Capital

  • Expect earnings to be driven by Active Pharmaceutical Ingredient and Custom Manufacturing Solutions businesses.
  • API business to contribute nearly 35 percent of FY19 estimated revenues for financial year 2019.
  • CMS to almost triple by FY19.
  • Merger with Neuland Pharma Research will improve earnings profile

Anand Rathi

  • Earnings to be subdued in the second half of the current financial year due to lack of orders.
  • Recent acquisition to be operational this year and resolve capacity constraints.
  • Expect earnings recovery from the second half of next financial year.

Systematix

  • Capacity constraints continue to impact performance.
  • Weak order flows for ciprofloxacin and salmeterol.
  • Strong outlook due to improvement in CMS.
  • Expect uptick in API business.
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