Shilpa Medicare, a R&D driven pharma company has got coverage initiated by Systematix Institutional Equities with a BUY rating. The firm has set a target price of INR 857 and an upside of 28% from current market price of INR 668 (as of 17 April 2025).
Shilpa Medicare: A Research Focused Pharma Innovator
Shilpa Medicare is a technology and research backed pharma company operating in a niche segment of complex and differentiated drugs. The company has product pipeline across several high potential platforms:
- Biosimilars
- Peptides
- Ready-To-Use (RTU) Injectables
- Orally Dissolvable Films (ODF)
- Transdermal Patches
- High-Potency Active Pharmaceutical Ingredients (APIs)
These products will help the company to capitalise on global opportunities and expand its international presence.
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Strategic Launches in US Market
A major milestone in Shilpa Medicare’s growth story is its foray into US injectables segment. The company has launched two ready-to-use injectable drugs – Pemrydi (Pemetrexed) and Boruzu (Bortezomib) in partnership with Amneal Pharmaceuticals. Both the products have USFDA approval and Systematix estimates the annual sales potential in US market to be between USD 50 to 100 million (~INR 427 to 854 crore).
This will not only strengthen the company’s presence in the lucrative US pharma market but will also drive significant revenue and profitability growth.
Revival in API Segment
Currently 67% of Shilpa Medicare’s revenue comes from API (Active Pharmaceutical Ingredient) business. Although this segment has been under pressure due to capacity constraints, the company has enhanced capacity for key API products. Hence double digit growth is expected from FY 2026.
Also the company is diversifying into new API formulations and expanding into CDMO (Contract Development and Manufacturing Organisation) space, further strengthening its long term growth story.
Strong Growth Outlook
Systematix expects strong growth for the company in medium term. For FY 2024 to FY 2027:
- Revenue growth at 16% CAGR
- EBITDA growth at 39% CAGR
- Net profit growth at a striking 119% CAGR
These numbers indicate solid fundamentals and operational leverage and Shilpa Medicare can scale up rapidly with focus on innovation, technology and global presence.
Conclusion
Systematix views Shilpa Medicare as a long term investment opportunity. The company’s innovation led approach, strategic launches in regulated markets and improving capacity utilisation in core business areas will drive sustainable and high margin growth. With target price of INR 857 the stock has 28% upside from current levels and is a pharma pick for investors looking at R&D backed growth stories in Indian pharma space.