Suven Pharma enhanced!

about 5 months ago
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Yesterday late evening, Suven Pharma announced a proposal of amalgamation with Cohance Lifesciences, upping its presence in the integrated CDMO space.

Cohance is a leading CDMO and Merchant API platorm with global leadership in select low-mid volume molecules as well as unique capabilibes in the form of its antibody drug conjugates (ADC) platorm.

Their CDMO segment has grown at healthy CAGR of 30%+ over FY20-23 and contributes 44% to its Gross Profits for 9mFY24.

The merged entity is expected to be amongst leading integrated CDMO players in India. With an expanded capacity to 2,650 kL and a significantly broadened customer base, scale and synergy benefits are substantial.

On the revenue front, the limited customer overlap will help with cross-selling opportunities, leveraging Cohance's capabilities to reach Suven customers and vice versa, e.g. leverage ADC platform and lifecycle management of key molecules for Suven customers.

Merged platform has best-in-class financial metrics: mid-30s EBITDA margins, 30%+ RoCE, sturdy cash flow generation over FY20-23.

The market is super-happy with this development and the overall optimistic mood on the Street too seems to have rubbed off on the stock. From its close of Rs.630.90, the stock today opened at Rs.653.95 and soon jumped up to an intraday high at Rs.712, up 13%. Its 52-week high stands at Rs.767.

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