Jefferies has issued five 'Buy' recommendations for CRDMO (Contract Research and Development Manufacturing Organization) stocks with target prices indicating upside potential ranging from 13.5% to 20%. The brokerage's latest assessment follows a strong June quarter for India's CRDMO sector, with companies under coverage delivering 19% year-on-year growth - the highest growth rate in the past seven quarters. According to The Financial Express, six of the nine companies covered by Jefferies beat its operational earnings estimates, with total sales increasing 14% year-on-year and total EBITDA rising 36%. Management commentary remained positive across several companies, with strong request-for-proposal inflows from Big Pharma companies and healthy order-book visibility.
Sai Life Sciences remains one of Jefferies' top picks in India's CRDMO sector with a 'Buy' rating and target price of ₹1,610, indicating 10.7% potential upside. The company reported 24% year-on-year growth in its CRO business during the June quarter and delivered a margin beat, with currency movement supporting the quarter's performance. As reported by The Financial Express, more than 90% of the company's targeted FY27 revenue was already covered by orders in hand, with Jefferies noting stronger client conversion and faster growth in peptides and antibody-drug conjugates. The brokerage expects FY27 revenue to have a 40:60 split between the first and second halves of the year, supporting more than 20% sales growth during FY27.
Divi's Laboratories is Jefferies' second top pick in the CRDMO segment with a 'Buy' rating and target price of ₹10,200, indicating 17.5% potential upside. The company's CDMO business grew 50% year-on-year in 1QFY27, with validation batches for major CDMO projects, new contracts and currency-related benefits supporting the strong performance. According to The Financial Express, Jefferies expects the strong CDMO sales run rate to continue as validation batches are supplied in coming quarters, with the company also expected to sign a multiyear CDMO contract for a contrast media product in the next three to four months. Several small-molecule and peptide projects are scheduled for launch over the next 12 to 18 months, with Jefferies raising its FY27 and FY28 revenue estimates by 3% and 2% respectively.
Jefferies has upgraded Gland Pharma from 'Hold' to 'Buy' with a target price of ₹3,350, indicating 19.6% potential upside. The company reported 20% year-on-year sales growth in 1QFY27 and raised its FY27 sales growth guidance to 15% or higher in constant-currency terms, compared with its earlier guidance of 12%-13%. As reported by The Financial Express, Jefferies attributed the performance to growth in the base business, currency-related benefits and margin gains. The brokerage raised its FY27 and FY28 revenue estimates by 4% and 6% respectively, with EBITDA estimates increased by 10% for FY27 and 11% for FY28.
Anthem Biosciences has a 'Buy' rating from Jefferies with a target price of ₹1,050, indicating the highest potential upside of 20% among the five CRDMO picks. The brokerage noted that the June quarter was affected by the timing of shipments for key products, with those shipments scheduled from 2QFY27. According to The Financial Express, the company said more than 80% of its targeted CRDMO sales for FY27 were already covered by its order book, with Jefferies estimating a 21% FY26-FY29 EBITDA compound annual growth rate and 25% return on capital employed for FY26. The company's commercial molecules accounted for 61% of FY26 sales, with Jefferies noting Anthem had the highest EBITDA margin and return on capital employed among Indian CRDMOs.
Jefferies maintains a 'Buy' rating on Piramal Pharma with a target price of ₹235, indicating 13.5% potential upside. The company's CDMO revenue increased 19% year-on-year during 1QFY27, supported by healthy order inflows across its sites and currency movement contributing to performance. According to The Financial Express, Piramal Pharma maintained its FY27 guidance for low-to-mid-teens sales growth and expects EBITDA and profit after tax growth to remain higher than revenue growth. The brokerage raised its FY27 revenue estimate by 1% and its FY28 estimate by 2%, while its FY27 EBITDA estimate was increased by 9%.
