Shares of Shaily Engineering Plastics Ltd were in focus after global brokerage UBS reiterated its Buy rating and assigned a target price of ₹4,000, implying an upside of around 36% from the previous closing price of ₹2,931.70.
The stock rose 2.5% during the day to touch ₹3,005, taking the company’s market capitalisation to ₹13,682 crore.
UBS remains positive on the stock
Shaily Engineering Plastics manufactures high-precision plastic components and assemblies and supplies products used in pharmaceutical delivery systems.
UBS believes several industry trends could support growth over the coming years.
Zydus semaglutide approval seen as a positive
According to the brokerage, the approval of Zydus’ semaglutide has positive implications for Shaily.
The development highlights regulatory acceptance of complex injectable delivery systems.
Shaily supplies pen components used in such devices, and UBS believes the approval could improve visibility on future orders and strengthen the company’s position in the fast-growing GLP-1 drug delivery market.
Pharma companies are diversifying suppliers
Regulatory scrutiny in the injectable devices industry is prompting pharmaceutical companies to reduce dependence on a limited number of vendors.
This trend could create opportunities for Shaily.
UBS expects supplier diversification to result in:
- Additional contracts.
- Higher capacity utilisation.
- Improved pricing power.
Compliance concerns support outsourcing
The brokerage also pointed to increased focus on quality and regulatory compliance in injectable device supply chains.
As pharmaceutical companies reassess sourcing strategies, manufacturers with established compliance standards could benefit.
UBS believes this shift may direct incremental business toward trusted suppliers such as Shaily.
Demand from GLP-1 therapies and biologics
Global demand for injectable drug delivery systems is rising, driven by growth in:
- GLP-1 therapies.
- Biologics.
Shaily’s partnerships with global pharmaceutical companies could help expand its addressable market and improve scale efficiencies, according to the brokerage.
Capacity expansion may boost margins
UBS said capacity additions and operating leverage provide further upside.
Higher utilisation levels, combined with export demand and outsourcing trends, could support margin expansion over time.
Strong relationships with pharmaceutical innovators are also expected to aid long-term growth.
Financial performance
For the quarter ended March 2026, the company reported:
- Revenue of ₹237 crore, up 8.7% from ₹218 crore in the year-ago period.
- Net profit of ₹40 crore, compared with ₹29 crore a year earlier.
Key financial metrics
Shaily Engineering reported:
- ROCE: 30.2%
- ROE: 28.2%
- Debt-to-equity ratio: 0.27
The company has also delivered a profit CAGR of 48.9% over the last five years.
Export business remains significant
Exports contributed 57.1% of revenue in Q4FY26, while domestic sales accounted for the remaining 42.9%.
The revenue mix reflects the company’s strong presence in international markets.
Manufacturing footprint
Founded in 1987, Shaily Engineering Plastics is India’s largest exporter of plastic components.
The company operates:
- Seven facilities in Gujarat.
- Six plastic manufacturing plants.
- One steel furniture unit.
- More than 200 injection moulding machines.
Its workforce comprises over 2,000 employees.
Outlook
UBS believes Shaily Engineering is well placed to benefit from rising demand for injectable drug delivery systems.
The brokerage expects supply chain diversification, capacity expansion and growing outsourcing by pharmaceutical companies to support earnings growth over the long term.
Key triggers highlighted by UBS
- Positive read-across from Zydus’ semaglutide approval.
- Growth in GLP-1 therapies and biologics.
- Supplier diversification by global pharma companies.
- Capacity expansion and operating leverage.
- Increasing outsourcing of device manufacturing.
TL;DR:
UBS has maintained a Buy rating on Shaily Engineering Plastics with a target price of ₹4,000. The brokerage expects growth in GLP-1 therapies, supplier diversification and capacity expansion to support long-term earnings.
AI summary:
- UBS has assigned a ₹4,000 target price to Shaily Engineering.
- The target implies about 36% upside.
- Rising GLP-1 demand is expected to benefit injectable device makers.
- Exports contributed 57.1% of revenue in Q4FY26.
- Capacity expansion and outsourcing trends could support growth.
