Given that listed names in this space are few and very small, we benchmark Akums to listed domestic formulation peers and assign 15x Sept’26E EBITDA (CDMO + Formulation biz) to arrive at TP of Rs700/sh. Our target multiple is at a c25% discount to domestic formulation peers which we justify given Akums’: a) lower pricing power; b) higher sensitivity to API prices; and c) lower margins/ returns.

Generally, recently listed companies are assigned a "High Risk" rating by our Quant risk model owing to their limited trading history. In that context, Akums is rated High Risk as per our Quant risk model. However, Akums has a healthy balance sheet and cash flow generation and hence we do not apply a High Risk rating.


Key risk factors that could impede the shares from reaching our target include: a) continued decline in API prices resulting in growth stagnation in the CDMO business; b) losses extend in the API and Trade Gx busienss segments; and c) slowdown in the formulation business.