Macquarie bullish on Suven Pharma, Divi's Labs, Bluejet and Syngene

ET BureauLast Updated: Feb 20, 2025, 05:32:00 AM IST

Synopsis

Macquarie said that the sector is currently at a turning point, driven by increased pharmaceutical outsourcing due to drug pricing pressures and geopolitical factors, prompting a global restructuring of the pharmaceutical supply chain.

Mumbai: Brokerage Macquarie has initiated coverage on Indian contract research, development, and manufacturing (CRDMO) companies catering to global drug makers, and has assigned an 'Outperform' ratings to Divi's Labs, Suven Pharma, Bluejet Healthcare, and Syngene.

Their price targets imply an upside of 19-30% for the shares over the next 12 months.

Macquarie said that the sector is currently at a turning point, driven by increased pharmaceutical outsourcing due to drug pricing pressures and geopolitical factors, prompting a global restructuring of the pharmaceutical supply chain.

"We believe favourable geopolitical dynamics, ease of doing business, and strong IP(intellectual property) protection laws further enhance India's position as a preferred partner for pharmaceutical R&D (research and development) and manufacturing," said the brokerage's analysts in a note to their clients.

Agencies

The industry has also benefited from the Inflation Reduction Act in the US, which is putting pressure on pharmaceutical companies to cut costs, and the US Biosecure Act, which has not been passed yet but has prompted US-based companies to move from Chinese to Indian and Korean manufacturers.

Macquarie's analysts said that the higher valuations of Indian companies compared to other peers are justified because they also project higher profitability growth in India.

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