Buy Senores Pharma; target of Rs 1640: Choice Institutional Equities

Choice Institutional Equities’s report on Senores Pharma

SENORES is strengthening its position as a US-focused player through a differentiated product portfolio, expanding commercial presence and integrated manufacturing capabilities. To gain deeper insights into the company’s growth strategy and execution roadmap, we visited its Ratnatris Plant and interacted with Mr. Swapnil Shah (MD) and Mr. Deval Shah (CFO). The visit provided valuable insights into the company’s US-focussed growth strategy, ANDA pipeline build-out and the newly-created Zoraya and Amerisyn front-end commercial JVs. The management reiterated that ~70% of revenue will continue to come from the US, supported by a visible pipeline of 97 ANDAs (58 approved plus 39 in pipeline which includes 5 approved), addressing a peak TAM of over USD 7 Bn. We believe the front-end JVs – Zoraya (51%-owned, direct marketing) and Amerisyn (70%-owned, government supply) – meaningfully expand SENORES’ addressable US market at near-zero incremental capex. This complements a continued CDMO scale-up (commercialised molecules up from 13 to 16).

Outlook

We raise our FY27E/FY28E EPS estimate by 19.5%/19.8% and roll forward our target multiple to 35x (from 30x) FY28E EPS, arriving at a revised TP of INR 1,640. A PEG of 1.1x further provides confidence on our valuation.

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Senores Pharma – 0907026 – choice