In This Article:
Kopran Limited (NSE:KOPRAN), a ₹2.16b small-cap, operates in the healthcare industry, which continues to endure a more demanding healthcare agenda, and the global need for innovative, cost-effective medicines continues to rise. Healthcare analysts are forecasting for the entire industry, a strong double-digit growth of 29.5% in the upcoming year , and an enormous growth of 83.8% over the next couple of years. This rate is larger than the growth rate of the Indian stock market as a whole. Today, I’ll take you through the sector growth expectations, as well as evaluate whether Kopran is lagging or leading in the industry.
Check out our latest analysis for Kopran
What’s the catalyst for Kopran’s sector growth?
Pharma companies are seeking ways to improve R&D productivity, increase the efficiency, and enhance financial performance. Over the past year, the industry saw growth in the twenties, beating the Indian market growth of 21.8%. Kopran lags the pack with its negative growth rate of -13.1% over the past year, which indicates the company has been growing at a slower pace than its pharmaceutical peers. Although Kopran is poised to deliver a 18.6% growth next year, moving it from negative to positive territory, it still lags its industry average rate of growth of 29.5%.
Is Kopran and the sector relatively cheap?
The pharmaceutical sector’s PE is currently hovering around 25.96x, above the broader Indian stock market PE of 19.55x. This means the industry, on average, is relatively overvalued compared to the wider market. However, the industry did return a higher 11.3% compared to the market’s 9.3%, which may be indicative of past tailwinds. On the stock-level, Kopran is trading at a lower PE ratio of 9.98x, making it cheaper than the average pharmaceutical stock. In terms of returns, Kopran generated 14.3% in the past year, which is 2.9% over the pharmaceutical sector.
Next Steps:
Kopran is a pharmaceutical industry laggard in terms of its future growth outlook. This is possibly reflected in the PE ratio, with the stock trading below its peers. If the stock has been on your watchlist for a while, now may be the time to dig deeper. Although the market is expecting lower growth for the company relative to its peers, Kopran is also trading at a discount, meaning that there could be some value from a potential mispricing. However, before you make a decision on the stock, I suggest you look at Kopran’s fundamentals in order to build a holistic investment thesis.
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Financial Health: Does it have a healthy balance sheet? Take a look at our free balance sheet analysis with six simple checks on key factors like leverage and risk.
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Historical Track Record: What has KOPRAN’s performance been like over the past? Go into more detail in the past track record analysis and take a look at the free visual representations of our analysis for more clarity.
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Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Kopran? Explore our interactive list of stocks with large growth potential to get an idea of what else is out there you may be missing!
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.