The brokerage firm Kotak Institutional Equities has highlighted three key stocks as top buy recommendations at this hour, highlighting strong growth potential in the pharmaceutical and AI-driven sectors.
With a shift in global trends favoring Indian CRDMOs (Contract Research, Development & Manufacturing Organizations) and technological advancements in AI, the brokerage has given a buy rating on these three stocks. Let’s take a look at the three stocks Kotak is betting on.
Piramal Pharma (PPL)
The brokerage firm Kotak has initiated coverage on Piramal Pharma (PPL) with a BUY rating, setting a fair value (FV) target of Rs 300, which translates to a 37% upside from its current market price. The brokerage believes that PPL’s diversified CRDMO presence and niche capabilities position it strongly for future growth.
According to the report, “PPL’s ramp-up in CRDMO sales, higher utilization at overseas facilities, and improved focus post-demerger with Piramal Enterprises are key drivers for its expected 13% revenue CAGR over FY24-28.”
Over the past decade, PPL has made over 15 acquisitions, enhancing its capabilities in CRDMO and complex product portfolios. With a strong pipeline and better financial discipline, the brokerage anticipates Rs 17 billion in free cash flow (FCF) generation over the next four years, addressing investor concerns about debt and return ratios.
Syngene International
Another key BUY recommendation is Syngene International, with a fair value target of Rs 875, implying a 22% upside. Syngene, one of India’s most prominent CRDMOs, is well-positioned to capitalise on the global outsourcing trend in pharmaceutical research.
The brokerage report notes, “Syngene offers a healthy blend of best-in-class small molecule expertise, compelling biologics offerings, and attractive valuations.”
What makes Syngene stand out is its “follow-the-molecule” strategy, allowing it to be part of a drug’s entire lifecycle, added the brokerage in its report.
Indegene
The brokerage firm remains bullish on Indegene, maintaining a BUY rating with an unchanged fair value of Rs 750. The brokerage highlights the company’s potential in AI-driven solutions, which are transforming pharmaceutical commercialisation and medical services.
“Generative AI presents a strong opportunity for Indegene to gain market share,” the brokerage noted . The company has been developing AI-based technology platforms to enhance service delivery for pharmaceutical clients, enabling faster turnaround times and cost efficiency.
Indegene’s unit-based pricing model further incentivizes AI adoption, helping clients reinvest savings into revenue-generating processes. The brokerage report further points out that early AI adoption pilots have been successful, and some have already started scaling up.