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]

Anlon Healthcare Ltd. : SCALING BEYOND API's

HERE IS WHY
✓  Moving Up the Value Chain
✓  Capacity-Led Growth
✓  CDMO and Regulatory Tailwinds

I ndia’s pharmaceutical manufacturing sector remains well placed, supported by global demand for cost-efficient supply chains and the China Plus One opportunity. Anlon Healthcare (Anlon) is positioned as a research-driven manufacturer of high-purity pharmaceutical intermediates and APIs, with a growing presence across custom manufacturing, finished dosage formulations and industrial and fine chemicals. It operates across 15 countries with capabilities in R&D, regulatory compliance and specialised API manufacturing.

Anlon’s business is evolving from an API and pharmaceutical-intermediatesfocused manufacturer into a more integrated pharmaceutical platform. The acquisition of Remember India Health Links, completed in May 2026, provides entry into finished dosage formulations across tablets, capsules and ointments, along with access to more than 30 formulation dossiers. Apiqo Organics strengthens backward integration for critical intermediates and industrial and fine chemicals, while Bizotic Lifescience provides a ready-to-operate facility that can accelerate capacity addition. Together, these acquisitions have taken installed capacity to approximately 1,400-1,600 MTPA.

The company’s growth outlook is supported by expanding capacity, product launches and a broadening R&D pipeline. Anlon plans to add seven new APIs in FY27 and file three to five additional DMFs, strengthening its presence across therapeutic categories and regulated markets. It also has 65 commercialised products, 28 in pilot stage and 49 under laboratory testing.

The CDMO opportunity is a mediumterm catalyst. Anlon has end-to-end capabilities from process development to commercial production and is developing specialty molecules for global innovators. Management indicated that one CDMO molecule remains on track for commercial supply by Q3 FY27, with two additional molecules expected around Q4 FY27 or Q1 FY28. The industrial and fine chemical business through Apiqo is already fully booked or overbooked, with management expecting ₹120 crore to ₹150 crore of FY27 revenue from this vertical.

Financial momentum has strengthened materially with the consolidation of acquisitions. Q1 FY27 consolidated total income rose to ₹87.62 crore from ₹33.31 crore in Q1 FY26, while EBITDA increased to ₹15.65 crore from ₹6.26 crore and PAT rose to ₹8.28 crore from ₹3.55 crore. EBITDA margin stood at approximately 17 per cent.

Management expects FY27 revenue of ₹350 crore to ₹400 crore and has indicated a potential ₹700 crore revenue level in FY28 if the planned expansion is completed on schedule. It is targeting EBITDA margins of approximately 25 per cent to 27 per cent in FY27.

Principal risks include volatility in petroleum-linked raw material costs, execution delays and integration risk. Management noted that solvents and petroleum-derived inputs account for roughly 40 per cent of API manufacturing costs, making crude prices, the rupee and freight costs important margin variables. Working capital is another monitorable, with management indicating that trade receivable days could remain elevated at 170 to 180 days. The company also carries approximately ₹70 crore of debt at an interest cost of around 8.5 per cent to 8.6 per cent.

The stock trades at a P/E of 34x, broadly in line with the industry P/E of 34.8x, while ROCE stands at 20.8 per cent. The combination of capacity expansion, acquisitions, regulatory filings and potential CDMO monetisation provides support for future earnings growth. Keeping the above factors in mind, we recommend BUY.

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