With valuations now lending some support, we upgrade our rating to BUY with a TP of Rs 2,000 (21x Jun19E). Channel destocking prior to GST implementation led to erosion of nearly a month of sales for Alkem Labs (ALKEM) in 1QFY18. Revenue came in at Rs 13bn, down 11% YoY, with the domestic business declining 21% YoY. Operating de-leverage and additional expenses on channel compensation led to a sharp fall in the EBITDA margin to 7.3%, contracting ~1100bps YoY. PAT was Rs 716mn, down 70% YoY.