Motilal Oswal has retained its Buy rating on Ajanta Pharma and left the target price unchanged at Rs 3,145, implying roughly 17 percent upside from current levels. The brokerage’s recent meeting with Ajanta’s management highlighted a strategic shift that could reshape the company’s medium term prospects: an asset‑light move into the anti‑obesity market together with geographic expansion and a transition towards chronic therapies.
Ajanta Pharma semaglutide strategy
The company will source semaglutide from Biocon under an in‑licensing arrangement, focusing on marketing rather than manufacturing. Ajanta holds exclusive or semi‑exclusive marketing rights across 23 African countries and three countries in the Middle East and Central Asia. With the semaglutide patent set to expire in March 2026 and approvals anticipated in late 2026 to early 2027, the arrangement lets Ajanta capture potential upside while avoiding manufacturing risk.
Motilal Oswal described Ajanta’s model as marketing led and asset light, which should permit faster roll‑out across target markets without the capital intensity of in‑house production. The brokerage noted that while generic competition may exert downward pressure on prices after patent expiry, the company’s established distribution rights and local sales strength could still support meaningful sales traction.
Alongside the semaglutide initiative, Ajanta is strengthening its commercial execution. Management plans a 5–6 percent annual increase in medical representatives on a base of around 2,000, and is targeting structurally larger geographies. Emerging markets are expected to provide a scalable platform supported by regular product launches and therapy additions. The shift from an acute‑led portfolio to a chronic‑centric franchise is intended to improve revenue durability and visibility, enhancing the quality of growth.
In the domestic market, Motilal Oswal pointed to Ajanta’s ability to outperform the Indian Pharmaceutical Market by 100–200 basis points over the past year, driven by incremental therapies supported by its MR footprint. Some therapies, such as ophthalmology, have faced seasonality and heightened competition, but overall outperformance versus the industry remains notable.
On earnings, analysts expect moderate growth of about 11 percent year on year in FY26, after a strong 23 percent earnings CAGR between FY23 and FY25. The brokerage attributes the moderation to incremental investments in the sales force for both base and newer therapies and describes FY26 as a consolidation phase. Motilal Oswal expects the benefits of these investments to materialise more clearly in FY27, forecasting c.20 percent year‑on‑year earnings growth that year. The semaglutide opportunity has not been incorporated into FY28 projections.
Risks include generics‑led price erosion for semaglutide after patent expiry and competitive pressure in key therapy areas. However, given Ajanta’s focused marketing rights across multiple countries, a sizeable MR base and a deliberate shift towards chronic care, analysts see a credible path to improved top‑line stability and medium‑term earnings expansion.
Investors should note the brokerage’s view is research based and not a recommendation to buy or sell. Independent due diligence and consultation with a SEBI‑registered financial adviser are advisable before making investment decisions.
Key Takeaways:
- Motilal Oswal retains Buy rating and a target of Rs 3,145, signalling about 17% upside.
- Ajanta is shifting to a chronic‑centric portfolio and plans to market semaglutide via an in‑licensing deal with Biocon.
- Expansion into larger geographies, MR growth and new product launches aim to strengthen revenue durability.
- Analysts expect moderate FY26 earnings growth with a stronger recovery in FY27; semaglutide upside for FY28 remains unmodelled.
