The 21 reports from 7 analysts offering long term price targets
for Alembic Pharmaceuticals Ltd. have an average target of 974.50. The consensus estimate
represents a downside of -0.72%
from the last price of 981.60.
Team in the Asia Money poll 2020. Click Here Alembic Pharma's 1QFY21 revenue at Rs13,413mn grew by 11.1% QoQ and 41.4% YoY. Revenue was 7%/14.1% above our/consensus estimates, respectively. The outperformance was largely driven by strong growth in API and ex-US generic formulation sales. API sales grew by 70% QoQ and Azithromycin exports were an important contributor. For the full year, the growth rate in API sales would be in the range of 15-20%. US sales were up 3% QoQ and were led by an increase in famotidine prescriptions, which were partially offset by lower sales in febuxostat and sartan...
Valuation and Risks: We upgrade our revenues by 3.2% / 3.3% for FY21E/FY22E at Rs 52 bn / Rs 56 bn respectively due to upgrade in US, ROW and API business.
Domestic sales comprise 31% of FY20 revenues with higher contribution from specialty (54% of domestic sales). However, despite having an established set-up, growth (FY16-20 CAGR of ~5%) has lagged the industry growth curve. Alembic is consciously focusing on this aspect by overhauling distribution channels (defocusing on trade generics). Overall, we expect...
Domestic Formulations A Mixed Bag: The domestic formulations industry grew by 9.7% during the quarter and 9.8% for the year. The last 15-20 days of the March quarter were an issue due to COVID-19 and lockdown. Digital marketing, video calling had replaced the traditional mode of personalvisits and marketing.
5 July 2020 ALPM delivered a 14% CAGR in US sales to USD280m (43% of sales) on account of 58 launches over FY1620. Particularly, in FY20, ALPM garnered 49% YoY growth, led by new launches (22) and partly by regulatory concerns witnessed by peers. On a high FY20 base, we expect a 10% CAGR in US sales to USD340m over FY20 22. ALPM would ramp up filings across new dosages (Ophthalmology, General Injectables, Oncology Injectables, and Oral Solids). The considerable share of revenue from new capex / product development would reflect in overall growth in US sales 2HFY22 onward; thus, it forms a marginal portion of the business trajectory over FY2022. ALPM delivered 13% YoY growth in 4QFY20, reflecting the benefit of the pre-buying of medicines (in anticipation of shortage due to COVID-19) and partly of renewed strategy. While efforts to improve sales growth have been on track, performance could be dented on account of the COVID-19-led slowdown.
Fairly valued - Await clarity on evolution of limited competition portfolio ACCUMULATE We initiate coverage on Alembic Pharma Limited (APL) with a target price of Rs835 and recommend an Accumulate at CMP. APL was founded in 1907 having a legacy that dates back to over a century. The company business is split between domestic branded formulations (31%), international generics (54%) and APIs (15%). APL has grown from a domestic focused name to a global generics player. In FY20, generic formulation sales in the US emerged as the single largest segment - contributing 43% to FY20 revenue. Unlike peers, where the US business has below par profitability, APL's profitability is superior with its revenue per Rx figures in the US at almost 2 ...
of capex is monetized from next fiscal. In the current disruptive environment, we reckon stocks with high certainty of earnings would command a disproportionate investorinterestandwidepremiumtosectoraverages.WebelieveAlembicPharma fitsthebillasitforaysintooncoandgeneralinjectablesandimprovestherevenue mixin3years.ExpectUSbusinesstoclock20%cagrexSartansovernext4yearsto touch ~US$450mn in FY24E. Domestic business should rebound and our recovery case is premised on strong close to Q4 FY20 as well as positive management commentary.WeassumemoderationingrossmarginthoughEBIDTAshouldpickup...
The company's revenue from Domestic Formulations (DF)grew by 13% to Rs.3.4 bn. US revenues grew by 84% on YoY basis to Rs. 5.8 bn. This has been on account of supply constraints in the Sartan space in the US market coupled with new launches. ROW markets grew by 61% to Rs. 1320 mn. API business degrew by 31% to Rs. 1550 mn during Q4 FY20.
Domestic sales comprise 31% of FY20 revenues with higher contribution from specialty (54% of domestic sales). However, despite having an established set-up, growth (FY16-20 CAGR of ~5%) has lagged the industry growth curve. The company is consciously focusing on this aspect with focus on overhauling of distribution channels (defocusing on trade...
ALPM remains on track in terms of finishing its large capex project (~INR25b) to enhance new dosage offerings and increase capacity requirements in the US Generics segment. ALPMs 4QFY20 revenues came in at INR12.1b, up 30% YoY, led by International Formulations (+80% YoY), supported by growth in the US segment (48% of sales; +84% YoY to USD75m) and the Non-US segment (11% of sales; +63% YoY). The gross margin expanded 140bp YoY to 78% owing to a superior product led by improved operating leverage (employee cost down -120bp YoY/other expenses down 520bp YoY as % of sales, offset by higher R&D; expense of For FY20, revenue/EBITDA/Adj.PAT stood at INR46.1b/INR12b/INR8.3b, largely led by strong traction in US generic. The US base business from already-approved products is likely to witness a quarterly run rate of USD70m (v/s USD50m up to 3QFY20) going forward.
On the business front, despite the nationwide lockdown, domestic growth is expected to remain more or less stable. Exports growth, barring for one or two months due to congestion in all major ports globally, is also expected to remain strong due to 1) currency benefit, 2) slowdown in competition due to delay in new approvals that will be beneficial for existing players and 3) expected demand continuum across the world despite Covid-19. Some windfall is also expected in some critical productsa case in point is Hydroxychloroquine, a malaria drug that is likely to be repurposed as a prophylaxis for Covid-19 treatment in some cases....
Specialty contribution in the domestic branded space increased to 63% in FY19 from 54% in FY14. However, despite having an established set up, growth (FY14-19 CAGR of 5%) has lagged the industry growth curve. The company is consciously focusing on this aspect with focus on overhauling of distribution channels (defocusing on trade generics). Overall, we expect...
Alembic Pharma (ALPM) reported a 15% EBITDA beat in Q3 driven by a sales beat and stable opex despite an additional expense hit from Aleor-Derma unit commercialisation.
22 January 2020 by International Formulations (+48% YoY), supported by the US (+61% YoY; 43% of sales) and Non-US (+15% YoY; 12% of sales) segments. However, muted growth in India (1% YoY; 30% of sales) and API business (-14% YoY; 15% of sales) dragged growth to some extent. Gross margin shrank marginally by 30bp YoY to 75% due to the change in 25%) led by lower employee cost (-70bp YoY) and other expenses (-470bp YoY), partly offset by higher R&D; expense (+110bp YoY). EBITDA increased PAT grew at a higher rate of 38% YoY (v/s EBITDA growth) to INR2.3b (our Sartans-led opportunity is expected to continue for the next 3-6 months. ALPM incurred capex of INR5.5b in 9MFY20, of which INR1.8b was in 3QFY20. As most sites would be ready by FY20, it would likely incur maintenance-related capex of INR3-3.5b annually. Gross debt stood at INR14.1b and cash at INR590m at end-3QFY20.
Alembic Pharma (ALPM) has underperformed the midcap and Sensex indices since 2015 due to subdued earnings. This cycle should reverse in the next 3-4 years.
