Neuland Labs gets buy from Anandrathi

Neuland Laboratories is expected to witness 14.8 per cent growth in revenue and

52.1 per cent growth in Ebitda on the low base. The company is expected to see a four times increase in earnings over FY19-21. Niche and CMS segments are expected to drive growth. The CMS revenue in last three quarters has declined by nine per cent as the CMS business is still in the early part of its maturity cycle. However, during

Q3FY19 it grew 84 per cent year-on-year supported by higher volumes and a rampup in projects. At present, the company has 13 projects: Four at the commercial stage, nine at the clinical stage. The brokerage believes that the CMS business would see a greater momentum on the addition of such projects. Considering the steep fall in the stock price and better earnings assurance, the broking house has upgraded our recommendation to a Buy from Hold, with a higher target of `693.

Broking firm: Anandrathi Rating: Buy Closing price: `584.45