Buy Senores Pharma Ltd for the Target Rs. 1,165 by Choice Institutional Equities
Continued Growth Momentum Backed by Strong Launch Pipeline
We continue to believe SENORES remains in a high-growth phase, supported by its product and market expansion strategy. ~30 owned ANDAs are planned for launch in FY27E, including high-margin CGT and FTF opportunities. Additionally, the EM business has a portfolio of 478 approved products, which we expect to be commercialised in the next 18–24 months. Further, we expect full benefits from the Apnar acquisition to accrue from H2FY27E, with FY27E revenue contribution estimated at INR 800–1,000 Mn. We believe improved product mix and operational leverage from Apnar scale-up should drive ~100 bps margin expansion in FY27E, with further improvement likely in FY28E. We forecast Revenue/EBITDA/PAT CAGR of 20.0%/23.5%/21.2% over FY26– 29E. We value the company at 30x FY28E EPS, arriving at a revised TP of INR 1,165 (earlier INR 1,045) and maintain a BUY rating.
Healthy Revenue Momentum; Margin Affected by Apnar Integration
* Revenue grew 53.4% YoY / 2.5% QoQ to INR 1,752 Mn (vs. CIE estimate: INR 1,591 Mn).
* EBITDA grew 144.3% YoY but declined 5.8% QoQ to INR 475 Mn (vs. CIE estimate: INR 504 Mn); margin expanded 1,009 bps YoY but declined 237 bps QoQ to 27.1% (vs. CIE estimate: 31.7%).
* PAT increased 77.3% YoY but declined 0.2% QoQ to INR 316 Mn (vs. CIE estimate: INR 358 Mn).
FY27E Margins to Expand ~100bps despite Acquisition Cost
EBITDA margin expanded sharply by 410 bps in FY26, driven by higher contribution from owned products and benefits of backward integration. While FY27E margin expansion may moderate due to incremental expenses related to the Apnar acquisition, we still project ~100 bps improvement. Margin expansion could accelerate further in FY28E as launches scale up and operating leverage strengthens.
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