Amanta Healthcare shares jump another 5% after a decent debut. Should you book profits or hold? – News Air Insight

Amanta Healthcare shares soared another 5% on the exchanges after a decent debut on Tuesday. The stock listed at a 7% premium over the issue price. Analysts say the performance reflects moderate optimism from the market towards the sterile injectables maker, even as valuations remain on the higher side. Amanta is valued at an FY25 P/E of around 46.6x, translating to a post-issue market capitalization of nearly Rs 489 crore.

According to Narendra Solanki, Head of Fundamental Research – Anand Rathi Shares, “the valuation is demanding, so investors must weigh execution risks against growth prospects.”

The Ahmedabad-based company develops and markets sterile liquid formulations, including large volume parenterals (LVPs), small volume parenterals (SVPs), and select medical devices.

Its facilities use advanced Aseptic Blow-Fill-Seal (ABFS) and Injection Stretch Blow Moulding (ISBM) technologies. The company sells over 45 products in India and exports to 21 countries, with registrations in more than 120 jurisdictions.

The IPO proceeds will be used for capacity expansion, including new manufacturing lines under the SteriPort brand and a dedicated SVP facility. This is expected to ease supply constraints and support growth in high-demand therapeutic areas. Analysts believe scaling up operations could strengthen margins and diversify revenue streams further.

What should investors do?

“From a strategy perspective, investors may consider booking partial gains upon listing while retaining some holdings for long-term potential,” Solanki said.

The expansion pipeline, product diversity, and export growth provide structural tailwinds. However, fresh investors eyeing quick gains may want to wait, given stretched multiples and sector headwinds.

Financials improving

Amanta has shown financial improvement, with revenue rising to Rs 274.7 crore in FY25. PAT climbed to Rs 10.5 crore from Rs 3.6 crore in FY24, reversing losses in FY23.

EBITDA margins remain healthy at over 21%. The company’s focus on branded generics, which account for more than half of revenue, and rising international sales (33% in FY25) underline a balanced growth model.

Risks to the business model

Amanta operates from a single manufacturing site in Gujarat, leaving it vulnerable to local disruptions. Dependence on a limited set of suppliers for raw materials such as LDPE and PP granules could trigger cost volatility, especially given crude-linked price swings.

Competition from larger pharma players, regulatory scrutiny, and pricing controls also remain key overhangs.

(Disclaimer: Recommendations, suggestions, views, and opinions given by the experts are their own. These do not represent the views of The Economic Times)