Neuland Labs (NLL) reported encouraging numbers with 41% YoY revenue growth and a 73% YoY jump in EBITDA in 3QFY19. However, EBITDA margin remained muted at 9% of sales (in line) on account of continued raw material pressure, underutilized facilities and inferior business mix. PAT at Rs 46mn was up 5x YoY. Beleaguered by several issues like: (1) spike in key raw material prices, (2) delay in Salmeterol approval in the US, and (3) negative operating leverage due to underutilized plants; NLL’s FY19 performance has been a repeat of the previous year. However, the company has been able to report robust revenue growth of 34% YoY over 9MFY19, aided by resolution of capacity issues. With strong visibility on softening of raw material price hikes, backward integration for key molecules like Cipro/ Levetiracetam, scale up in high margin segments of Niche API/ CMS, increased contribution from Unit 3, and a significant ramp up in the generic Salmeterol market in the US by 2HFY20; we expect ~14% revenue CAGR, ~900bps EBITDA margin expansion and ~5x jump in earnings over FY19-21E. We are also enthused with NLL’s progress in the CMS segment with the inclusion of 4 new commercial projects in 3Q. Remain bullish on the stock and maintain BUY with a TP of Rs 830 (14x Dec-20E EPS).