Pharma Picks: Sun Pharma and 5 Stocks With Targets of Up to 26% Given by ICICI Direct

Synopsis: Six pharma and pharma-linked stocks are on analysts’ radar with upside potential of up to 26%, backed by improving fundamentals, recovery in key markets, and strong domestic and export growth prospects despite near-term volatility and sector-specific challenges.

The pharmaceutical sector continues to offer selective opportunities as earnings visibility improves across branded formulations, injectables, APIs, and CDMO segments. Brokerages remain constructive on companies with strong balance sheets, differentiated portfolios, and recovery levers in the US and emerging markets. From large-cap leaders to mid-cap niche players, these six pharma stocks offer upside potential of up to 26%, supported by margin recovery, capacity expansion, and sustained demand momentum.

Sun Pharmaceutical Industries Ltd

Sun Pharmaceutical Industries Ltd is engaged in the business of manufacturing, developing and marketing a wide range of branded and generic formulations and Active Pharma Ingredients (APIs) and is the largest pharmaceutical company in India. With the market cap of Rs 4,08,847 crore, the shares of Sun Pharmaceutical Industries Ltd closed at Rs 1,704  and are trading at a PE of 33.7, whereas its industry PE is at 29.1

ICICI Direct has reiterated a buy call with a target of Rs 1,910, offering an upside of around 12% from the CMP of Rs 1,704. The broking remains confident in Sun Pharma’s speciality portfolio, strong domestic formulations business, and healthy cash flows. Continued traction in speciality products and stable India growth offset risks from US generic pricing and regulatory uncertainties.

Ajanta Pharma Ltd

Ajanta Pharma is primarily engaged in the development, manufacturing and marketing of speciality pharmaceutical-quality finished dosages. With the market cap of Rs 35,450 crore, the shares of Ajanta Pharma Ltd closed at Rs 2,821 and are trading at a PE of 35, whereas its industry PE is at 29.1

ICICI Direct has assigned a Buy rating with a target of Rs 3,270, compared with a CMP of Rs 2,821, implying an upside of about 16%. The positive view is driven by strong branded generics performance in India and emerging markets. A debt-free balance sheet, high return ratios, and a focus on profitable therapies support earnings stability, while regulated market growth provides incremental upside.

Acutaas Chemicals Ltd

The company is one of the leading research and development-driven manufacturers of speciality chemicals and manufactures different types of advanced pharmaceutical intermediates and Active Pharmaceutical Ingredients (API) for New Chemical Entities and materials for agrochemicals and fine chemicals. With the market cap of Rs 16,281 crore, the shares of Acutaas Chemicals Ltd closed at Rs 1,988 and are trading at a PE of 56.7, whereas its industry PE is at 29.1

IDBI Capital has set a target price of Rs 2,501 on the stock, against CMP of Rs 1,988, implying a sharp upside of about 26%. The broker believes the recent stock correction offers a valuation comfort. Focus on speciality chemicals, export growth, and capacity expansion are long-term drivers. Margin improvement is expected as raw material costs stabilise, though near-term volatility may persist.

Gland Pharma Ltd

Gland Pharma is a contract manufacturer of small-volume liquid parenteral products, becoming one of the largest and fastest-growing injectable-focused companies, with a global footprint across several countries, including the United States, Europe, Canada, Australia, India and other markets. With the market cap of Rs 31,132 crore, the shares of Gland Pharma Ltd closed at Rs 1,890 and are trading at a PE of 36.1, whereas its industry PE is at 29.1

ICICI Direct has maintained a Buy rating with a target of Rs 2,275, versus CMP of Rs 1,890, indicating an upside of nearly 20%. The optimism is based on gradual recovery in the US injectables market and easing pricing pressure. Strong regulatory compliance, a diversified product pipeline, and improving capacity utilisation are key positives, while demand normalisation is expected to aid margin recovery going ahead.

Laurus Labs Ltd

Laurus Labs is a research-driven pharmaceutical and biotechnology company having a global leadership position in select active pharmaceutical ingredients (APIs), including antiretroviral and oncology drugs (incl. high-potency APIs), cardiovascular, and gastro therapeutics. With the market cap of Rs 52,941 crore, the shares of Laurus Labs Ltd closed at Rs 980 and are trading at a PE of 63, whereas its industry PE is at 29.1

ICICI Direct has pegged a target of Rs 1,170 versus CMP of Rs 980, indicating an upside of roughly 19%. The broker expects recovery in the CDMO and formulations segments as client orders normalise. Strong API presence and diversification into new therapies support long-term prospects. Margin recovery is expected with better capacity utilisation, despite near-term earnings volatility.

RPG Life Sciences Ltd

RPG Life Sciences Ltd manufactures and markets formulations (finished dosage forms) and active pharmaceutical ingredients. With the market cap of Rs 3,258 crore, the shares of  RPG Life Sciences Ltd closed at Rs 1,970 and are trading at a PE of 31, whereas its industry PE is at 29

ICICI Direct has given a buy call with a target price of Rs 2,470, compared to the CMP of Rs 1,970, implying an upside of about 25%. The broking is positive on the company’s steady growth in branded formulations, especially in chronic therapies. Stable margins, consistent cash flows, and a focused domestic portfolio support earnings visibility. ICICI Direct expects operating leverage and product launches to drive medium-term growth.

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