Expecting a further pickup in Emcure Pharmaceuticals’ organic growth in 2HFY25, domestic brokerage firm Kotak Institutional Equities upgraded the stock’s rating to ‘buy’ from an ‘add’ earlier, with a target price of Rs 1,680.This signals an upside potential of 28% from Monday’s stock closing price.“After a decent 1HFY25 print, we expect a further pick-up in Emcure’s organic growth in 2HFY25, with upbeat prospects across India, Canada and ROW. Compared to 6% yoy in 1HFY25, we estimate 9% yoy overall organic growth in 2HFY25E,” said Kotak in its report.Led by healthy organic growth, an in-licencing deal with Sanofi, consolidation of Mantra and with most of the legal challenges behind, Emcure is expected to report a 13% overall sales CAGR over FY2024-27E. On a low base, improved productivity post the 20%+ field force addition since FY2022 is expected and higher utilisation of the new facilities is likely to drive robust 18%/29% EBITDA/EPS CAGRs, over FY2024-27E.On the international front, it is expected that Emcure’s organic business in Canada will report a strong 16% YoY growth in 2HFY25. Moreover, aided by the Mantra deal (consolidated from Nov 2023), the domestic brokerage firm forecasts a robust 19% Canada sales CAGR, over FY2024-27E.Also, a pick-up in ARV sales is expected, with strong traction for Tenecteplase to drive an 11% ROW sales CAGR, over FY2024-27E.Emcure is one of the few major Indian pharma players with no meaningful direct US generics exposure, thereby lending greater earnings stability.Also read: Vodafone Idea shares zoom 18% on in-principle Cabinet nod for bank guarantee waiverLed by its R&D prowess, Emcure has built a complex portfolio (40% of sales), comprising chiral molecules, iron compounds and biologics. It is a leading player in gynaecology and has also scaled up brands across multiple therapies, such as cardiac, VMN, anti-infectives and antivirals, leading to one of the highest prescription coverages (71%) among specialists in the IPM.A renewed focus is likely to drive robust 13%/18%/29% overall sales/EBITDA/EPS CAGRs, over FY2024-27E.However, further repercussions due to the drug price-fixing cases in the US/Canada, further litigations such as the now-resolved one with HDT Biocorp and the inability to consistently outperform IPM growth are the key risks stated by Kotak Equities.The shares of Emcure Pharma were trading 5.6% higher at Rs 1,384.75 on the BSE around 12 noon on Tuesday.(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)