Emcure Pharma shares soar 10% after Q2 results; check what brokerages recommend

Shares of Emcure Pharmaceuticals Ltd surged 10 per cent to hit a record high of Rs 2,180.80 in Wednesday's trade following the pharmaceutical company's September quarter (Q2 FY27) earnings.

A few brokerages largely maintained a positive stance on the stock, citing growth across domestic and international businesses.

Elara Securities said Emcure's Q2 FY27 performance was broadly in line with its estimates. Revenue came in 6 per cent above its estimates, while EBITDA was in line. Profit after tax (PAT) was 5 per cent below expectations due to lower other income and a higher tax rate.

The brokerage estimated that organic growth in Emcure's domestic business improved to 11 per cent year-on-year (YoY). Its international business also reported strong growth, with Canada and Europe recording growth of 15 per cent and 25 per cent, respectively, in constant currency (CC) terms, as per its estimates. The rest-of-the-world (RoW) business grew 41 per cent YoY.

Elara noted that international revenue increased 34.5 per cent YoY during the quarter. It also highlighted the management's decision to raise its FY27 growth guidance to around 20 per cent from the earlier mid-teens outlook.

The management indicated that the company would achieve the upper end of its guidance of 70-100 basis points (bps) in margin expansion, Elara said.

The brokerage raised its FY27-FY29 estimated core earnings per share (EPS) by 5-9 per cent and increased its target price to Rs 2,158. It maintained its 'Accumulate' rating on the stock.

HDFC Securities recommended a 'Buy' rating on Emcure Pharma, with a target price of Rs 2,208 and a time horizon of up to next Diwali. The brokerage's recommended buying range is Rs 1,863-1,898, with an additional buying level of Rs 1,681 on dips.

The brokerage expects strong growth across business segments and operating leverage to drive a compound annual growth rate (CAGR) of 18.5 per cent in EBITDA and 25 per cent in PAT over FY26-FY29.

The brokerage said Emcure's domestic growth strategy focuses on execution across priority franchises, improving field force productivity and expanding its product pipeline through in-house development and strategic partnerships.

Among the key factors supporting its positive view, HDFC Securities cited market share gains by key brands, a strong product pipeline in international markets, and improved field force productivity alongside new launches to drive domestic formulation (DF) growth.

However, it flagged regulatory inspection-related issues, adverse pricing regulations by the National Pharmaceutical Pricing Authority (NPPA), and delays in approvals or launches, as well as unexpected competition in niche products, as potential risks to the company's growth outlook.