Jefferies’ Top Picks in CRDMO: A Detailed Analysis
The Indian pharma sector is expected to be in focus heading into trade on Friday after Jefferies’ latest note that witnessed target price hikes for key stocks such as Divi’s Labs and Sai Life Science, while Piramal Pharma and Cohance saw their price targets cut.
CRDMO Space: Challenges and Opportunities
In its latest note, the brokerage firm has come out with a note on companies that are involved in contract research, development, and manufacturing organisation (CRDMO) space. The CRDMO space has been facing challenges in recent times, with 2025 being a difficult year due to destocking challenges. However, Jefferies believes that the passage of the Biosecure Act will boost mid-to-long-term growth prospects for the industry.
Jefferies’ Top Picks: Divi’s Labs and Sai Life Science
Jefferies has raised the target price for Divi’s Labs from an earlier target of Rs 7,850 to a fresh target of Rs 8,000, while maintaining a ‘buy’ rating on the counter. The firm has also retained a ‘buy’ call on Sai Life Science, hiking the target price from Rs 1,100 to Rs 1,180. Jefferies’ top picks in the CRDMO space are Sai Lifesciences and Divi’s for strong execution and healthy growth outlook.
Target Price Cuts: Piramal Pharma and Cohance
Jefferies has maintained a ‘buy’ on Piramal Pharma, but has cut the target price from Rs 235 to Rs 210. The brokerage has maintained ‘hold’ in both Cohance Life and Concord Biotech. Target price for Cohance was cut from Rs 650 to Rs 540, while Concord’s new target price stands at Rs 1,290, down from Rs 1,500 earlier.
Investment Strategy: Short-Term Selectivity and Long-Term Growth
Jefferies highlighted long-term growth prospects for these stocks, though it advises short-term selectivity. The brokerage firm believes that 2026 is expected to be a mixed year, with volatility from patent expiries and destocking uncertainties likely coming into play. However, Jefferies believes that the passage of the Biosecure Act will boost mid-to-long-term growth prospects for the industry. It also believes that a soft base will kick in H2CY26 for most names and improve growth optics.
For investors looking to invest in the CRDMO space, it is essential to have a long-term perspective and be selective in the short term. Investing in the stock market requires a thorough understanding of the market trends and the ability to make informed decisions. With the right investment strategy and a long-term perspective, investors can benefit from the growth prospects of the CRDMO space.