Goldman picks 2 pharma stocks, screams sells on Laurus Labs

Here's what Goldman said:

Syngene: Buy with target price of Rs 875

Goldman expects the company to be the largest beneficiary of China+1 given its ability to offer end-to-end service to customers right from discovery to commercial manufacturing.

"Barring the short-term macro challenges in CY24, we see multiple catalysts for the company in the form of improving biotech funding environment, ramp-up of Mangalore API/ Stelis biologics plant in H2FY25/FY26, and new contract wins especially in the current anti-China environment," the brokerage said.

Also read |

Neuland Labs: Buy with target price of Rs 9,100

Neuland is a leading manufacturer of active pharmaceutical ingredients (APIs) and an end-to-end solution provider for the pharmaceutical industry’s chemistry needs. Multiple catalysts for the company include

improving biotech funding environment, new capacity at unit-3 coming online from FY25-end, and commercialisation of a large molecule in FY26/27.

Besides this, any progress on the US Biosecure Act could bring in disproportionate benefits to the company, Goldman said.

Laurus Labs: Sell with target price of Rs 350

Over the years, Laurus has transitioned from being an Anti retroviral (ARV) player to an API company to then vertically integrating to formulations and has now invested heavily in its CDMO business.


"Although we appreciate management’s capex efforts, which should benefit the company meaningfully from FY26/27 onwards, our Sell rating is based on unfavourable risk-reward: lack of catalysts for CDMO business in CY24, mismatch in timelines for new capacity monetisation vs. the street expectations, slower FY25 growth (vs. peers) with risk on margin guidance vs expensive valuations," it said.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)