Downgrade to NEUTRAL with a TP of Rs 555 (20x on Sep-19E). Alembic Pharmas (ALPM) top-line declined ~10% YoY in 2QFY18 on a high base of 2QFY17, which included limited competition sales of gAbilify. There was QoQ growth of 23%. The domestic business performance was disappointing, growing only ~6% YoY in spite of the benefits of channel re-stocking. The EBITDA margin surprised positively at ~23%, up 230bps/690bps YoY/QoQ (370bps beat). This was largely driven by operating leverage and a favourable business mix. PAT stood at Rs 1.2bn, up ~82% QoQ.