Recommendation from Healthcare Sector

This section gives a recommendation of a stock having stock price below Rs 150 with sound fundamentals and expected to give handsome returns over a one-year time horizon[EasyDNNnews:PaidContentStart]

Ind-Swift Laboratories Ltd: FORMULATIONS LED TURNAROUND

HERE IS WHY
✓  External debt eliminated
✓  Export led platform
✓  FY27 catalyst

I n pharmaceuticals, the strongest moat is rarely built in advertising. It is built in audit rooms, process discipline, and the habit of shipping the same quality batch every time. India’s pharma sector is now in a phase where investors are rewarding execution, regulatory credibility, and sustainable profitability rather than debt-driven expansion. Exports remain a key lever, but durable value is typically created by companies that scale without compromising compliance and improve product mix to support margins. In this backdrop, Ind-Swift Laboratories (INDSWF) has materially improved its risk profile after a balance sheet clean-up and a simpler corporate structure.

The transformation has been driven by two decisive moves. First, the company divested its API and CRAMS business for a headline consideration of ₹1,650 crore and used the proceeds to eliminate external debt. This reduces financial risk, removes the drag from funding costs, and creates headroom to invest in product filings, registrations, and capacity without stretching the balance sheet. Second, the merger of Ind Swift Limited into Ind Swift Laboratories, effective March 31, 2024, streamlined the corporate structure into a single listed, formulations-led entity, improving operational alignment for customers and stakeholders.

Post the reset, INDSWF is positioning itself as a finished dosage formulations platform with an export-heavy orientation. The company manufactures tablets, capsules, injectables, liquids, dry syrups, and ointments, and cites 750 plus product registrations across therapies such as gynaecology, paediatrics, cardiology, diabetology, and dermatology. It operates facilities at Derabassi, Parwanoo, and Jammu. Management also cites 1,915 plus dossiers filed and 520 plus approvals, underpinning access to regulated and semi-regulated markets. The domestic business complements this with branded and generic presence.

Financially, FY25 is presented as the base year after the clean-up, with revenue of about ₹550 crore and profit before Tax and exceptional items of about ₹41 crore. The mix remains export-led, with export sales of about ₹399 crore and domestic sales of about ₹150 crore. Recent quarterly performance shows profitability improving even as revenue stays steady. In Q3 FY26, consolidated revenue from operations was ₹150.85 crore and total income was ₹178.43 crore. Net profit after tax for the quarter was ₹9.54 crore. For the nine months ended December 2025, revenue from operations was ₹456.23 crore and net profit after tax was ₹26.30 crore.

Looking ahead, the investment case rests on visible growth triggers converting into sustained, repeatable volumes. A key catalyst is the partnership with Viatris (Europe), where the company indicates commercial supplies start from FY27 and has referenced an incremental revenue impact of about ₹200 to ₹220 crore. Export acceleration also depends on converting filings into approvals and launches, with management indicating 400 plus new registrations in 2026 and a pipeline that includes higher barrier products such as ticagrelor and empagliflozin. Selective CDMO scaling can add visibility, while operating leverage and mix improvement can support the stated ambition to move from a ₹550 crore base towards materially higher revenues over the next few years.

On valuation, the stock trades at approximately 19x P/E, below an industry average near 28x, leaving room for a valuation re-rating if execution stays on track. Risks remain executionled and typical of export-oriented pharma, including regulatory compliance, pricing pressure in certain markets, competition. Overall, with a cleaner structure, stronger balance sheet, and improving profitability, we maintain a BUY view on INDSWF.

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