The news triggered an upward rally in the stocks, with Cohance Lifesciences gaining 5.5%, Divi’s Laboratories advancing 2.5% to an intraday high of Rs 6,314.5, and SAI Life Sciences rising about 2% to Rs 943 apiece on the NSE.
According to Jefferies,India’s CRDMO (Contract Research, Development, and Manufacturing Organization) industry is experiencing a major shift, evolving from traditional chemical manufacturing to becoming a strategic partners for global innovators. This transformation is fueled by enhanced capabilities, geographic diversification, and the strategic China+1 approach, which the brokerage expects will drive a high-teen revenue CAGR over the next ten years.
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Jefferies Top Picks and Target
SAI Life Sciences has been named Jefferies’ top pick in the sector, backed by its integrated service offerings, strong East-West presence, and high growth visibility. The firm expects a 15% revenue CAGR and 24% EBITDA CAGR over FY25–28E, with a target price of Rs 1,100, representing a 19% upside from its last close of Rs 924.
Cohance Lifesciences has been initiated with a Buy rating and a target price of Rs 1,150, implying a 28% upside from its recent close of Rs 896. Jefferies expects Cohance to post the highest growth rate among its CRDMO coverage, with EBITDA CAGR exceeding 25% over FY25–28E. The company is also viewed as the strongest ADC (Antibody-Drug Conjugate) play in the Indian listed space, supported by a strong management team and proven execution.Divi’s Laboratories has been upgraded to Buy, driven by optimism around its GLP-1 drug pipeline, with a target price of Rs 7,150, indicating a 19% upside from the closing price of Rs 6,027.Also read: Ola Electric shares rally 5% on policy talks to speed EV adoption
India’s CRDMO sector—a USD 3 billion revenue industry—has experienced a 14% CAGR over the past five years. However, growth has been uneven due to Covid-related demand surges followed by a slowdown. Looking ahead, Jefferies estimates a high-teen revenue CAGR of 18% between FY25 and FY30E, driven by strong pipeline visibility, Big Pharma’s diversification through the China+1 strategy, and increasing demand for weight loss and type 2 diabetes drugs (such as GLP/GIP therapies).
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)
