ICICI Securities recommends buying Akums Drugs at Rs 710

ICICI Securities has issued a buy recommendation for Akums Drugs & Pharmaceuticals, setting a target price of Rs 710. This is based on the company's potential for profitable growth. The current market price of Akums is Rs 508.1. The company is focusing on improving its margins by reducing losses in its Active Pharmaceutical Ingredients (API) division and attracting new export orders by calendar year 2027. Despite some challenges, Akums has maintained a strong margin of 15.5% for its Contract Development and Manufacturing Organization (CDMO) and 12.0% overall EBITDA margin during the first nine months of the fiscal year 2025. ICICI believes that if API prices stabilize, the company might see an increase in volume growth. Furthermore, Akums plans to enhance its product offerings through better hormone products and a new plant for injectables, which should contribute to value growth and improved margins. The brokerage expects losses in the API division to diminish, with a break-even point anticipated by the end of fiscal year 2027. Promoters own 75.26% of the company, while Foreign Institutional Investors (FIIs) hold 6.36%, and Domestic Institutional Investors (DIIs) have a stake of 6.71%.