2783.35 -46.30 (-1.64%)
NSEMar 05, 2021 03:31 PM
The 8 reports from 4 analysts offering long term price targets for Alkem Laboratories Ltd. have an average target of 3263.75. The consensus estimate represents an upside of 17.26% from the last price of 2783.35.
|Summary||Date||Stock||Broker||Price at Reco.||Target||Price at reco|
Change since reco(%)
|2020-11-09||Alkem Laboratories L.. +||HDFC Securities||2769.80||3315.00||2769.80 (0.49%)||19.10||Buy|
We value Alkem at 22x Sep 22 EPS and arrive at a target price of Rs3,315/sh. We initiate coverage on Alkem with a BUY based on the following factors: (a) recovery in acute therapies is likely to benefit Alkem the most, given its dominant position in the segment (rank 1 in Anti-infective, rank 3 in Gastro, rank 3 in Vitamins); (b) steady market share gains in chronic (+50bps over the past five years) will contribute to higher growth and profitability; (c) rising scale in US generics (USD300mn, growing at double digit CAGR) will contribute ~20% to FY23 EBITDA vs. single digit in FY20
|2020-11-07||Alkem Laboratories L.. +||Dolat Capital||2752.75||3290.00||2752.75 (1.11%)||18.20||Buy|
Alkem reported an in-line 2Q driven by exports and speedy recovery in India. Despite an acute heavy portfolio, India formulations were flattish YoY, up 35% QoQ exhibiting a sharp recovery aided by double digit growth in trade generics. US ($84mn) was strong with 12% CC growth backed by new launches and market share gains. As marketing and promotional activities resume slowly in India (~70%), EBITDA margins came 120bps lower sequentially at 25.4%. However, with promotional activities resuming normalcy we expect 2H to report margins of 15-16%,...
|2020-10-12||Alkem Laboratories L.. +||BOB Capital Markets Ltd.||2707.80||3600.00||2707.80 (2.79%)||29.34||Buy|
|2020-08-08||Alkem Laboratories L.. +||BOB Capital Markets Ltd.||2978.00||3600.00||2978.00 (-6.54%)||29.34||Buy|
|2020-06-06||Alkem Laboratories L.. +||Motilal Oswal||2394.55||2850.00||2394.55 (16.24%)||Target met||Buy|
We remain positive on ALKEM due to robust ANDA pipeline/minimal regulatory risk in the US and 4QFY20 revenues grew 10.6% YoY to INR20.5b (v/s est. We expect 15% earnings CAGR over FY20-22E, led by 16%/10% sales CAGR in the US/DF generics on new launches and better traction in existing The reduced promotional expense in DF and improving profitability in the US should drive 220bp margin expansion over FY20-22E. Based on product pipeline and minimal regulatory risk in the US, we expect ALKEMs US sales to deliver 16% CAGR at ~USD420m over We cut our EPS estimates by 6%/4% for FY21/FY22E to factor in the weakness in DF segment over the near term. We expect 15% earnings CAGR over FY20-22E, led by 16%/10% sales CAGR in the US/DF generics on new launches and better traction in existing products.
|2020-06-05||Alkem Laboratories L.. +||BOB Capital Markets Ltd.||2375.45||2950.00||2375.45 (17.17%)||Target met||Buy|
|2020-06-05||Alkem Laboratories L.. +||Dolat Capital||2375.45||2515.00||2375.45 (17.17%)||Target met||Buy|
Revenues (Rs 20bn, up 10% YoY) came in line with estimates as exports led the growth (India grew 3% YoY), gross margins at 56.3% (down 540bps QoQ and 180bps YoY) was impacted due to product mix (higher contribution from trade generics and competition in Mycophenolate in the US) coupled with higher API prices from China. Despite poor gross margins, lower fixed costs and employee expenses (15% cost is variable) led to EBITDA margins at 14.8% (up 210bps...
|2020-03-13||Alkem Laboratories L.. +||BOB Capital Markets Ltd.||2413.85||2870.00||2413.85 (15.31%)||Target met||Buy|
BOB Capital Markets Ltd.
INFOE: On a slippery slope initiate with SELL. Monthly Eco Chartbook: RBI's rate cut to support growth. Inflation and IIP: Inflation falls, growth rebounds. Balance of Payments: Favourable outlook on CAD
|2020-01-07||Alkem Laboratories L.. +||BOB Capital Markets Ltd.||2124.05||2124.05 (31.04%)||Buy|
|2020-01-06||Alkem Laboratories L.. +||Ashika Research||2257.85||2423.00||2257.85 (23.27%)||Target met||Buy|
Alkem Laboratories, established in 1973, is 5th largest pharma company in India by domestic sales. The company is leader in the acute therapies and has also invested in the chronic therapies. Alkem's US business grew at 24% CAGR over FY16-19 when its large peers struggled for growth. The company faced earning challenges over FY17-19 due to the macro events, weak seasonality, distributor restructuring, API price inflation and FDC ban. FY20E however is proving to be favorable for earnings with strong acute season and continued growth in the US business. With strong domestic business, continued growth in the US business and already completed capex, we believe Alkem has better earnings visibility. The potential...
|2019-08-14||Alkem Laboratories L.. +||HDFC Securities||1767.20||2180.00||1767.20 (57.50%)||Target met||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 (55.46%)||Target met||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 (55.46%)||Target met||Buy|
|2019-07-01||Alkem Laboratories L.. +||BOB Capital Markets Ltd.||1676.25||2100.00||1676.25 (66.05%)||Target met||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 (55.06%)||Target met||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.. +||Motilal Oswal||1760.00||2100.00||1760.00 (58.14%)||Target met||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 (63.44%)||Target met||Buy|
|2019-03-26||Alkem Laboratories L.. +||Motilal Oswal||1765.10||2170.00||1765.10 (57.69%)||Target met||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.
|2019-02-09||Alkem Laboratories L.. +||HDFC Securities||1904.60||2340.00||1904.60 (46.14%)||Target met||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 (45.73%)||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.