ICICI Securities Recommends Buying Indegene, Sets Target Price at Rs 620
ICICI Securities Maintains Positive Outlook on Indegene
ICICI Securities's research report on Indegene has highlighted the company's robust revenue growth performance, with broad-based traction across its Enterprise Clinical Solutions (ECS) and Enterprise Medical Solutions (EMS) offerings. Notably, the issues affecting one of its top clients appear to have subsided for the time being. Despite this, Indegene's operating margin came in at 12.1%, which was below the expectations of ICICI Securities, primarily due to lower gross margins. However, depreciation and other expenses remained within the expected range.
The management's commentary was upbeat, citing a strong sector demand with a compound annual growth rate (CAGR) of 5.8% from FY26 to FY28, along with an acceleration in the biotech sector. ICICI Securities has maintained its positive outlook on Indegene, citing three key factors: the reduction of policy overhang on the health-tech sector, the smooth integration of acquired entities, and the company's industry-high revenue per employee.
Key Drivers of ICICI Securities' Positive Outlook on Indegene
| Reason | Description |
|---|---|
| Growth Beat | Indegene's revenue growth performance exceeded expectations |
| Holistic AI Adoption | The company's adoption of artificial intelligence has led to faster go-to-market |
| Large Deal Traction | Indegene has seen significant traction in large deals |
In light of these factors, ICICI Securities has maintained its buy rating on Indegene, with a target price of INR 620 for March 2027. This estimate is based on a one-year forward price-to-earnings (P/E) ratio of 24x, with projected earnings per share (EPS) of INR 26 per share for Q5-Q8.
Investor Takeaway
Investors should consider buying Indegene due to its robust revenue growth and positive sector demand.
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