Emcure Pharma lists at 31% premium; should you buy, sell or hold the stock?

Emcure Pharmaceuticals listing today: According to analysts, Emcure Pharma is quoting at a reasonable valuation with a niche opportunity to invest in the gynaecology & HIV antivirals therapeutic areas

Stock strategy after Emcure Pharma listing today: Namita Thapar-backed Emcure Pharmaceuticals made a stellar debut on Indian bourses on Wednesday, July 10, with the shares getting listed at Rs 1,325.05 on the BSE, a 31.45 per cent premium over its issue price of Rs 1,008.

Post listing, Emcure Pharma shares moved higher to Rs 1,383.65, quoting 5.2 per cent higher to the listing price. 

The robust debut follows an overwhelming response to Emcure Pharma's IPO which saw an overall subscription rate of 67.87 times. The retail category was subscribed 7.36 times, while the Qualified Institutional Buyers (QIB) category saw an astonishing 191.24 times subscription. Additionally, the Non-Institutional Investors (NII) category was subscribed 49.32 times.

 

The oversubscription and listing gain highlight investor confidence in Emcure's diversified product portfolio, and international market reach. However, the pharmaceutical industry's regulatory stringency and potential disruptions in the raw material supply chain still require ongoing monitoring, analysts said. 

“Emcure Pharma's listing performance is positive, which aligns with pre-listing anticipation. The strong investor response and listing gain demonstrate confidence in the company's future potential. However, the identified risks within the pharmaceutical industry necessitate ongoing monitoring by investors. Investors may hold their positions by keeping a stop loss at 1200,” said Shivani Nyati, Head of Wealth, Swastika Investmart Ltd.

According to analysts, the company is quoting at a reasonable valuation with a niche opportunity to invest in the gynaecology and HIV antivirals therapeutic areas.

“Emcure Pharmaceuticals has forayed into research, and develops, produces, and markets pharmaceutical products worldwide across many therapeutic areas. Considering the company's innovative product portfolio, successful global footprints and R&D base. Investors could hold the stock post listing,” said Narendra Solanki, Head Fundamental Research - Investment Services, Anand Rathi Shares and Stock Brokers.

The IPO comprised a fresh issue of 7.9 million shares totaling Rs 800.00 crores and an offer for sale of 11.4 million shares amounting to Rs 1,152.03 crores. The pharma company raised Rs 582 crore from 48 anchor investors at the upper price band of Rs 1,008 per equity share.

In fiscal year 2023-24 (FY24), Emcure Pharmaceuticals Limited recorded a revenue growth of 11.33 per cent, amounting to Rs 6,715 crore compared to Rs 6,031 crore in FY23. However, the company's profit after tax (PAT) declined by 6.1 per cent to Rs 527 crore in FY24 from Rs 561 crore in FY23.

Emcure Pharmaceuticals, an Indian pharmaceutical company, develops pharmaceutical products across various major therapeutic areas.

As of MAT September 2023, Emcure Pharmaceuticals Limited held the 13th rank in domestic sales among pharmaceutical companies in India and commands the 4th position in market share within its covered markets. Furthermore, the company leads in the therapeutic areas of gynaecology and HIV antivirals for the same period.