Pharma stock to buy: Up 2x in 1 year, this stock may be headed even higher; here's why

The domestic equity benchmarks Nifty50 and Sensex ended on a flat note today, May 27. However, the indices hit record highs early in the day led by a rally in banking and financial services stocks.

Sensex closed at at 75,390.50, down 19.89 points, or 0.03 per cent while Nifty 50 closed at 22,932.45, up 24.65 points, or 0.11 per cent.

Meanwhile, analysts suggest buying this pharma stock. Check out target prices.

Pharma stock to buy

Zee Business analyst Kushal Gupta suggests investors buy pharma stock Zydus Lifesciences for one year. On Monday, May 27, the stock closed at Rs 1,058.6 each, up 1.6 per cent or 17.35 per share on BSE.

The company reported super Q4 numbers. FIIs have been increasing stake since the Oct-Dec 2022 quarter in Zydus Lifesciences, said Gupta.

Zydus Lifesciences - Share price target

Gupta has given a target price of Rs 1,300 per share. The target implies an upside of more than 22 per cent from Monday's closing price.

How brokerages view Zydus Lifesciences 

Brokerage KRChoksey downgrades its recommendation from 'buying' to 'accumulate'. It has given a target price of Rs 1,186 per share after the pharma giant's earnings announcement. 

"The company’s stock is trading at 25.5x/25.6x its FY25E/FY26E EPS estimates and we increase the valuation multiple to 26.0x (earlier 25.0x) on FY26E EPS of Rs 43.1 (earlier Rs 40.2) and arrive at a target price of Rs 1,186 (earlier Rs 1,006) and downgrade our 'buy' on the stock to 'accumulate'," said the brokerage.

"The company's outperformance in Q4Fy24 was on the back of strong show in the US and Emerging and Europe markets, improved products mix, lower input costs, improved gross margins in consumer wellness and improved price realisations," believes brokerage.

The brokerage's target implies an upside of more than 12 per cent from Monday's closing price.

On the other side, Sugandha Sachdeva, founder of SS WealthStreet, says, "The shares of Zydus Lifesciences have been in a secular uptrend for the last two years. Prices witnessed a fresh breakout above Rs 670 levels in December 2023 and have been advancing higher since then. Recently, the stock reached a new all-time high of Rs 1172.50. While decoding the price structure, Zydus Life shares exhibit promising signs with a new base insight at the 915-920 zone, showcasing a bullish double bottom pattern on the monthly timeframe."

"Despite the stock appearing somewhat extended, investors can consider opportunities to buy on dips, provided the support area around 915-920 holds on a closing basis. Moreover, momentum indicators signal further potential upside for the stock. Looking ahead, Zydus Lifesciences' shares could potentially climb towards Rs 1,250 initially, and can target the Rs 1550 mark from a medium-term perspective," added Sachdeva. 

The views/suggestions/advices expressed here in this article are solely by investment experts. Zee Business suggests its readers consult their investment advisers before making any financial decision.

Zydus Pharma share price history

The 52-week high of the company's share is Rs 1,171.95 and the low is Rs 498.90. The market cap of the company is Rs 1,06,514.90 crore. Talking about the returns of the stock, it has increased by 10 per cent in one month, 68 per cent in six months, and more than 100 per cent in one year.