The 14 reports from 5 analysts offering long term price targets for Alkem Laboratories Ltd. have an average target of 2147.20. The consensus estimate represents an upside of 21.15% from the last price of 1772.35.
|Summary||Date||Stock||Broker||Price at Reco.||Target||Price at reco|
Change since reco(%)
|2019-08-14||Alkem Laboratories L..||HDFC Securities||1767.20||2180.00||1767.20 (0.29%)||23.00||Buy|
With a lower than expected impact of gMycophenolate competition in the US, coupled with the highest top-line growth in India business among large-cap peers (1QFY20), we maintain our FY20/21E revenue estimates for Alkem and model a 13% CAGR over FY19-21E. The profitability, too, is likely to expand by 100-120bps YoY with lower raw material prices and improving business mix. With moderated tax expectations, we model 25% EPS CAGR over FY19-21E. Alkem remains among the fastest-growing companies in the Indian market while its performance in the US also stands out. At CMP, Alkem is available at 18x FY21E EPS. Considering its stable branded business, healthy cashflows (~Rs 8bn annual FCFF over FY20/21E), and reasonable return ratios (22% RoIC in FY21E), we believe this is unjustified. We maintain BUY on ALKEM despite a big miss on our 1QFY20 estimates. Our TP is 2,180 (22x FY21E EPS) with estimates largely unchanged owing to a sharp recovery expected in the next two quarters following a shift in the seasonally strong quarters (from 1Q earlier to 2Q now).
|2019-08-13||Alkem Laboratories L..||Reliance Securities||1790.45||2050.00||1790.45 (-1.01%)||15.67||Buy|
We remain positive on the medium to long-term growth prospects of Alkem on the back of stable revenue growth from high-margin domestic business (outpace IPM growth). However, EBITDA margin is expected to reel under pressure in FY20E/FY21E owing to robust growth in low-margin US business (last 6 quarters average growth at 36%+ YoY) and large number of field force addition (2,000 added in FY17-19 and 1,000 in 1QFY20). At CMP, the stock trades at a PE of 23.7x and 20.3x of FY20E and FY21E earnings, respectively. As we expect the stock to command premium over its peers owing to healthy return ratios and higher exposure to India business, we maintain...
|2019-08-13||Alkem Laboratories L..||BOB Capital Markets Ltd.||1790.45||2100.00||1790.45 (-1.01%)||18.49||Buy|
|2019-07-01||Alkem Laboratories L..||BOB Capital Markets Ltd.||1676.25||2100.00||1676.25 (5.73%)||18.49||Buy|
BOB Capital Markets Ltd.
Alkem Labs is a midsized pharma company (US$ 1bn sales) with India and the US as key markets. It is the market leader in several key acute segments in India. We believe a recovery in Alkem's India business profitability and rising US operating leverage would revive earnings to a 22% CAGR over FY19-FY21 (after a weak FY17-FY19). Post 40% underperformance to the Sensex in the last two years, the stock is trading at 12.3x FY21E EV/EBITDA, implying compelling risk-reward....
|2019-05-31||Alkem Laboratories L..||HDFC Securities||1795.00||2250.00||1795.00 (-1.26%)||26.95||Buy|
Despite reporting subdued performance in FY19, we remain optimistic over Alkem as we believe the impact of raw material price hikes will alleviate in FY20E, and the domestic business is likely to recover on a softer base of FY19. We expect Alkem to return to normal business margins of 16-16.5% in FY20E. Although it is unlikely to repeat its US performance (+39% YoY) next year due to incremental competition, we do believe a 10%+ YoY growth is achievable owing to 8-10 yearly launches. With the expectation of 14/26% revenue/earnings CAGR, Alkem is available at ~17x FY21E EPS. Considering the stable branded business, healthy cashflows and reasonable return ratios, we believe this is unjustified. We maintain BUY on ALKEM following a big beat to our estimates. Our target price is at Rs 2,250 (22x FY21E EPS).
|2019-05-30||Alkem Laboratories L..||Reliance Securities||1760.00||2050.00||1760.00 (0.70%)||15.67||Buy|
|2019-05-30||Alkem Laboratories L..||Motilal Oswal||1760.00||2100.00||1760.00 (0.70%)||18.49||Buy|
period due to changes in the distribution policy, adjusting for which domestic sales growth was in early teens. US business sales were up 19% YoY at INR4.8b. Other international business sales grew 20% YoY to INR1.2b. Margins supported by lower operating cost: Gross margin shrank 300bp YoY to 58.2% on account of product mix change (competition intensified for high-margin products). However, the EBITDA margin expanded 400bp YoY to 12.8% due to lower other expenses (-580bp YoY)/employee cost (-120bp YoY). EBITDA was up 81% YoY at INR2.3b due to high revenue growth and...
|2019-04-26||Alkem Laboratories L..||Ventura||1703.00||2306.00||1703.00 (4.07%)||30.11||Buy|
|2019-03-26||Alkem Laboratories L..||Motilal Oswal||1765.10||2170.00||1765.10 (0.41%)||22.44||Buy|
26 March 2019 ALKEM has ramped up its US sales to 6x over FY13-18 on new launches, reasonable market share gains in existing products, and partly on low base. For 9MFY19, ALKEM delivered strong 34% YoY growth to ~USD200m. We expect growth in ALKEMs US business to remain intact despite competition in one of its key products; newer approvals should offset the decline in base business and aid growth in the US generics segment. We expect the base effect to smoothen out and ALKEM to be back on track with aggressive growth in its chronic portfolio and on major therapies in the acute category, thereby aiding 14% revenue CAGR over FY19-21E. Based on 23% earnings CAGR expected over FY19-21E and led by healthy performance in the DF segment, enhanced margins in the US generics business, and attractive on the stock. For 9MFY19, US sales stood at USD200m and saw 34% YoY growth.
|2019-02-11||Alkem Laboratories L..||Reliance Securities||1896.00||1896.00 (-6.52%)|
|2019-02-09||Alkem Laboratories L..||HDFC Securities||1904.60||2340.00||1904.60 (-6.94%)||32.03||Buy|
Maintain BUY with a revised TP of Rs 2,340 (22x Dec-20E EPS). Alkems 3QFY19 performance was in line with our expectations. A softer acute season led to a 1% fall in the domestic business, while the 44% jump in the US helped in maintaining 10% plus YoY top line growth. Poor business mix (lower India sales) and increased raw material cost led to a ~680bps drop in gross margin. As a result, EBITDA margin shrunk 450bps YoY and EBITDA declined 13% to Rs 3.1bn. Reported PAT at Rs 2.1bn was up 14% YoY owing to higher taxes in 3QFY18
|2018-11-05||Alkem Laboratories L..||HDFC Securities||1910.00||2415.00||1910.00 (-7.21%)||36.26||Buy|
Maintain BUY with a TP of Rs 2,415 (22x Sep'20E EPS). Alkems 2QFY19 performance was ahead of expectation with EBITDA margin improving 614bps QoQ to 19% (100bps beat) and PAT coming in at Rs 2.6bn, down 19%YoY (16% beat). Revenues grew 3%YoY to Rs 19bn, in line with our estimates. Within segments, India business declined 6%YoY on a high base due to post-GST restocking last year, while US revenues grew 55%YoY to Rs 4.7bn, on the back of new product launches and currency tailwinds.
|2018-11-03||Alkem Laboratories L..||HDFC Securities||1896.00||1896.00 (-6.52%)||Results Update|
|2018-11-02||Alkem Laboratories L..||Motilal Oswal||1896.00||2500.00||1896.00 (-6.52%)||41.06||Buy|
2 November 2018 muted growth of 3%YoY to INR19.2b (v/s est. of INR17.5b) on back of 6% YoY decline in domestic formulation (DF, 69% of sales), which was off-set by strong 55% YoY growth in the US business (25% of sales). Gross margins declined by ~180bp YoY (flat QoQ) to ~60.2% due to increased share of relatively low margin US business. Increased other expenses and employee cost (up ~270bp and ~60bp, as percentage of sales) led to contraction of ~570bp YoY in EBITDA margin to 19% (our est. Sequentially, EBITDA margin has expanded ~610bp due to improved operating leverage. R&D; spend was INR1.1b, 5.5% of sales v/s 5.9% of sales in 1QFY19. PAT declined by ~21% YoY to INR2.
|2018-08-14||Alkem Laboratories L..||Reliance Securities||2022.00||2390.00||2022.00 (-12.35%)||Buy|
ff US FDA: Alkem is yet to receive The US FDA clearance for St. Louis facility. However, it has already received EIR for Daman unit (inspected in Mar'18), while the US FDA inspected its Baddi plant between 6-10th Aug-18 with zero observations....
|2018-08-11||Alkem Laboratories L..||HDFC Securities||2050.00||2410.00||2050.00 (-13.54%)||Buy|
Maintain BUY with a revised TP of Rs 2,410 (24x FY20E EPS) Alkems 1QFY19 results were largely below our estimates. Revenue at Rs 16.7bn, was up 28.9%YoY and 10.3%QoQ. EBITDA of Rs 2.1bn grew 127%YoY with margin coming up to 12.8%, up 550bps YoY. PAT at Rs 1.4bn was 115% higher than that in 1QFY18. The impressive growth is attributed to a low GST-hit base. EBITDA, margin, and PAT missed our estimates by 21%, 380bps, and 22% YoY respectively. Domestic growth was 25.7%.
|2018-05-31||Alkem Laboratories L..||HDFC Securities||1909.00||2445.00||1909.00 (-7.16%)||Buy|
Maintain BUY with a revised TP of Rs 2,445 (24x FY20E EPS). The fourth quarter is seasonally weak for ALKEM, and 4QFY18 was no different. The top-line grew 21% YoY but declined 13%QoQ to Rs 15.1bn. EBITDA margin at 7.5% and PAT at Rs 745mn missed our estimates by ~440bps and 46% respectively. R&D; spend during the quarter was significant (7.4% of sales vs 6.7% expected), with 11 ANDAs filed in 4QFY18. There was also MTM loss of Rs 283mn included in other expenses for real estate investments. Adjusted for this, EBITDA margin was at 9.4% in 4QFY18.
|2018-02-15||Alkem Laboratories L..||Axis Direct||2129.70||2500.00||2129.70 (-16.78%)||Buy|
|2018-02-14||Alkem Laboratories L..||Reliance Securities||2138.00||2610.00||2138.00 (-17.10%)||Buy|
Robust Growth in India Business; Maintain BUY Alkem Laboratories (Alkem) has reported a healthy performance in 3QFY18. Its revenue grew by 17.4% YoY to Rs17.4bn on the back of robust 22% YoY and 13.7% YoY growth in India and other export business, respectively. Despite a soft 6.1% YoY growth (10% YoY in CC terms), its US business grew by 18.1% QoQ due to ramp-up in Benzonatate (owing to seasonality) and launch of gNexium/gPrasugrel. Led by positive operating leverage and low YoY base, EBITDA grew by 34.2% YoY to Rs3.6bn while EBITDA margin expanded by 258bps YoY to 20.7%. However, despite a strong operating performance, Alkem's adjusted PAT declined by 4.3% YoY due to...
|2018-02-12||Alkem Laboratories L..||HDFC Securities||2180.00||2435.00||2180.00 (-18.70%)||Buy|
Maintain BUY with a revised TP of Rs 2,435 (25x Dec-19E EPS). Alkem Labs (ALKEM) followed up the bumper 2Q performance with another strong quarter in 3QFY18. Revenue came in at Rs 17.4bn, up 17% YoY, with the domestic business growing 15% YoY. EBITDA came in at 3.6bn, up 34% YoY. The margin was 20.7% (up ~250bps YoY), driven up largely by a strong gross margin and operating leverage. Improved gross margin (64%, +200bps QoQ) was largely owing to the product mix in India, with chronic contributing well in 3QFY18. However, mgt expects gross margin to moderate to sustainable levels of 60-62%. PAT came in at Rs 1.7bn, down 27% YoY, impacted by a higher tax rate (45.6% vs 7.5%). The one-off DTA adjustment after the change in the US tax laws was ~Rs 450mn.