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Alembic Pharmaceuticals Ltd Research Report - 21st Jan 2016

Pharmaceutical | Published on Nov 10th 2015

IT

For 2QFY2016, Alembic Pharmaceuticals (Alembic Pharma) posted numbers well ahead of our expectations. It posted an 84.5% yoy growth in sales to end the period at Rs1,008cr V/s Rs750cr expected. On the operating front, the OPM came in at 37.2% V/s 27.8% expected and V/s 19.5% in 2QFY2015. R&D expenditure during the quarter was 9.4% of sales V/s 13.0% of sales in 2QFY2015. The net profit consequently came in at Rs289cr V/s Rs177.3cr expected and V/s Rs77.3cr in 2QFY2015, a yoy growth of 273.4%. We maintain our Neutral rating on the stock, considering the fuller valuations. Results better than expectations: For 2QFY2016, the company posted numbers well ahead of our expectations. It posted an 84.5% yoy growth in sales to end the period at Rs1,008cr V/s Rs750cr expected. This was primarily driven by gAbilify’s launch in the US. Overall formulations were 84% of sales in 2QFY2016, with international generic accounting for 45% of sales and Indian branded accounting for 34% of sales. International generics (Rs559.3cr) posted a sales growth of 342% yoy. The Indian formulation branded sales (`2,846cr) posted a sales growth of 3.3% yoy. The API business posted a yoy growth of 43% yoy. On the operating front, the OPM came in at 37.2% V/s 27.8% expected and V/s 19.5% in 2QFY2015. R&D expenditure during the quarter was 9.4% of sales V/s 13.0% of sales in 2QFY2015. The net profit consequently came in at Rs289cr V/s Rs177.3cr expected and V/s Rs77.3cr in 2QFY2015, a yoy growth of 273.4%. Outlook and valuation: Alembic Pharma’s growth and profitability profile has improved post the restructuring carried out by the Management. Over FY2015-17E, we expect the company to post a CAGR of 23.1% and 26.1% in sales and net profit, respectively. We recommend a Neutral rating on the stock.

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CMP 675
Target Price
Investment Period12 Months

Stock Info

MCAP BSE (Rs in Cr)12,047.98
MCAP NSE (Rs in Cr)12,072.48
P/E (x)20.61
EPS (Rs.)31.00
BV (Rs.)88.59
Div Yield (%)0.63
FV (Rs.)2.00
P/BV (x)7.02
EV/Sales (x)3.75
EV/EBITDA (x)12.96

Shareholding Pattern (%)

Promoter74.0
Foreign11.0
Public & Others11.0
Institution3.0
Corporate1.0
Grand Total100.0

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