1
Please refer to important disclosures at the end of this report
1
1
In 2011, Alembic Pharma Ltd(APL) was de-merged from Alembic Ltd to
provide more thrust to formulations and insulate this business from the
vagaries of commoditised APIs. Formulations account for 79% of the
business while the rest comes from APIs. As of 9MFY20, specialty
contribution in the domestic branded space increased to 63% from 54% in
FY14. Consolidated revenues and PAT have grown at a CAGR of 16% and
20%, respectively, in FY14-19. The company continues to send mixed signals
with high performing US engine (albeit on Sartan success) at one end and a
somewhat laggard domestic portfolio at the other end. The management
expects 10-12% domestic annual growth from FY21 on the back of ongoing
restructuring of distribution patterns. For the US, with the aggressive R&D
and capex, the management has signalled its long term strategy for the next
five to six years. This includes a foray into niche areas like oncology,
injectables, derma, etc.
It is trading at P/E valuation of 16.7x of 9MFY20 earnings and has a good
return on equity (ROE) track record last 3 Years ROE 22.2%.Hence BUY.
BUY
CMP `646
0.3
Reuters Code
ALEM.BO
ALPM IN
2
BSE Sensex
40,894
Nifty
11,993
Face Value (`)
Pharmaceuticals
Market Cap (` cr)
12,171
52 Week High / Low
685/435
Avg. Daily Volume
11,624
Jaikishan Parmar
022 – 3935 7600 Ext: 6810
jaikishan.parmar@angelbroking.com
Alembic Pharma Ltd
Others|Pharmaceuticals
Feb 18, 2020
2
Alembic Pharma Ltd|Pharmaceuticals
2
Research Team Tel: 022 - 39357600 E-mail: [email protected] Website: www.angelbroking.com
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Ratings (Based on expected returns Buy (> 15%) Accumulate (5% to 15%) Neutral (-5 to 5%)
over 12 months investment period): Reduce (-5% to -15%) Sell (< -15)