Entero Healthcare shares jump after Jefferies initiates buy with 50% upside

Shares of Entero Healthcare Solutions Ltd., a stock that recently listed on the bourses is locked in a 20% upper circuit on Friday, marking its best single-day gain since it listed in February this year.

The move comes after Jefferies initiated coverage on the stock with a “buy” recommendation and a price target of ₹1,510. This price target implies a potential upside of 50% from Wednesday’s closing levels for Entero.

According to Jefferies, Entero is a fast-growing healthcare products distributor which operates in a large and fragmented market. It is expecting Entero’s organic revenue to grow at a Compounded Annual Growth Rate (CAGR) of 20% over financial year 2024 – 2026.

Additionally, the brokerage also expects Entero to benefit from industry consolidation going forward.

Over the same timeframe, Jefferies is expecting overall revenue for Entero to grow by 44% and adjusted profit to increase by 8 times as “economies of scale” kick-in.

Over the same timeframe, Jefferies is expecting overall revenue for Entero to grow by 44% and adjusted profit to increase by 8 times as “economies of scale” kick-in.

Entero Healthcare is a pharmaceutical products distributor which also offers a range of medical devices and consumables along with patient support and technology solutions.

Shares of Entero Healthcare had debuted on the bourses on February 16 this year at a 2% discount to its issue price of ₹1,258. The stock eventually ended 9% lower on its listing day. Shares made a low of ₹970 on March 28. The company’s three-day IPO worth ₹1,600 crore received overall subscription of 1.53 times.

Despite the 20% upper circuit that the stock is currently locked in, it remains below its IPO price of ₹1,258 per share.

Shares of Entero Healthcare are in a 20% upper circuit currently at ₹1,202. CNBCTV18