Alembic Pharmaceuticals Ltd. share price target

Q2 revenue ticked up 8% YoY as healthy sales in international markets supported by modest India business

Alembic reported a healthy 17.7% YoY revenue growth driven by traction in the export business and APIs. Operational cost of three new plants impacted margins. Management does not expect any material escalation in overhead costs ahead. Company has launched only 5 products (15-20 filed) from the three new sites, which may not be able to improve profitability in the near term.

Alembic Pharma’s (Alembic) Q3FY23 overall performance was a mixed bag. Revenue grew 18.7% YoY to Rs15.1bn (I-Sec: Rs14.1bn). India business grew 11.7% YoY. API revenue was up 64.6% YoY (+10.9% QoQ) to Rs.3.3bn, partially supported by a bulk order in a certain CMO contract.

Alembic Pharma’s (Alembic) Q2FY23 performance was broadly in line with our estimates. Revenue grew 14.1% YoY to Rs14.8bn (I-Sec: Rs14.4bn). India business (excl. one-time benefits) grew ~11% YoY.

Alembic Pharma’s (Alembic) Q1FY23 performance was below our estimates due to sharp fall in US sales, which declined 37.3% QoQ to US$47mn on high base in Q4FY22 owing to inventory restocking, lower offtake during the quarter and continuous price erosion in the base business. India business (ex-covid) grew ~20% YoY.

Q4 revenue growth at 11% YoY led by broad-based domestic uptick and 17% growth in the US; ROW declined 19% YoY

The company has invested ~ | 1800 crore in recent years in facilities geared mainly towards US formulations. As of Q3FY22, it has filed 220 ANDA and has 154 approvals with 104 launches in the US Q3FY22 Results: Alembic reported mixed numbers with traction in domestic...

Alembic Pharma (ALPM) delivered in-line operating performance for 3QFY22. The growth momentum in domestic formulation (DF) business was offset by weakness in exports and API segment on a YoY basis. Interestingly, the US sales have been largely stable for three quarters now. We have reduced our FY23E/FY24E earnings by ~4%/2% to factor in: a) a delay in injectable approvals, b) higher logistics cost, and c) better outlook in DF segment. We value ALPM at 18x 12M forward earnings to arrive at our TP of INR820, implying 8% potential upside. Maintain Neutral....

Q3 revenue dipped 3% YoY on a steep decline in US (-23%) and API (-8%) business, despite growth in India (+17%) and ROW (+13%)

Alembic Pharmaceuticals Ltd (ALPM') reported in-line numbers for Q2FY22 on the back of strong momentum in domestic business and better gross margins (~74% vs ~71% in Q1FY22). US business continued to remain under pressure on the back of pricing pressure in the base business and full impact of Theophylline competition in Q2FY22. Domestic business (ex Azithromycin) grew >30% YoY as per the management which was led both by margins and price hikes. On Rhizen, TG Therapeutics have guided USD 50mn sales for Ukoniq over next year which would entail higher royalty revenues. While the management has withdrawn its FY22 EPS guidance, higher launch rate, faster remediation of Injectable unit and approval for CLL indication remains key positive triggers for the medium term.We maintain BUY on the stock, with a March-23 TP of Rs1,200, thus an upside of 51% over the CMP. ALPM is currently trading ~18x / ~13x PE for FY22E / FY23E. Delay in Remediation of F3 (New Injectable Facility), USFDA action in Panelav F1 and domestic...