Top Undervalued CDMO Stocks in India to Watch
The most undervalued CDMO stocks in India to watch
Mint
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Indian Contract Development and Manufacturing Organizations (CDMOs) are poised for growth as regulatory standards tighten. Key players like Akums Drugs, Syngene International, and Jubilant Pharmova present investment opportunities with strong market positions and growth plans. Investors should consider long-term fundamentals and valuations before investing.
- 01Akums Drugs holds a 30% market share in India's CDMO sector and has seen significant profit growth.
- 02Syngene International, a major CRDMO, recently faced revenue declines but is diversifying its business.
- 03Jubilant Pharmova is expanding its CDMO capabilities, particularly in sterile injectables.
- 04Regulatory changes in India are expected to benefit established CDMOs.
- 05Valuations for these companies are attractive compared to their historical averages.
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The Indian Contract Development and Manufacturing Organization (CDMO) sector is gaining attention as regulatory standards tighten, creating opportunities for established players. Akums Drugs & Pharmaceuticals leads the market with a 30% share in outsourced manufacturing, boasting a 51% compound annual growth rate (CAGR) in net profit. The company is expanding into regulated markets like Europe and has plans for a manufacturing plant in Lusaka, Zambia, expected to start production in 2028. Syngene International, a global CRDMO, has experienced a 3% decline in revenue due to challenges with a major client but is working to diversify its offerings and has extended its partnership with Bristol Myers Squibb through 2035. Meanwhile, Jubilant Pharmova is focusing on its CDMO segment, particularly sterile injectables, with plans for significant capital expenditures. As these companies adapt to changing regulations and market demands, their current valuations are appealing, with Akums trading at a price-to-earnings (PE) ratio of 24, Syngene at 38, and Jubilant at 29, all below their five-year averages. Investors should carefully assess these firms' long-term fundamentals and governance before making decisions.
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As regulatory standards tighten, established CDMOs like Akums and Syngene are likely to benefit from increased business opportunities, which could lead to job creation and enhanced service quality in the pharmaceutical sector.
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