Alembic Pharmaceuticals Ltd. share price target

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 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....

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 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 While the management has withdrawn its FY22 EPS guidance, higher launch rate, faster remediation of Injectable unit and approval for CLL indication remains key positive triggers for the medium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...

Alembic Pharma (ALPM) delivered in-line 2QFY22 earnings. Subdued performance in US/API was offset by a better-than-expected show in the Domestic Formulation (DF) segment. The YoY declining trend in the US business has reached a trough with the limited impact of price erosion and an increased pace of launches going forward. We lower our FY22E/FY23E EPS estimate by 7.5%/5.8%, factoring in a) a delay in successful compliance at injectables sites, b) gradual revival in US sales, and c) higher RM/logistics costs. We value ALPM at 18x 12M forward...

Domestic business has 1.5% of market share of IPM with three brands in the top 100. Going ahead, emphasis is on specialty segment with 94% of new launches being specialty products The company has invested ~ | 1800 crore in recent years in facilities geared mainly towards US formulations. As of Q2FY22, it has filed 214 ANDA and has 150 approvals with 98 launches in the US...

Consequent PAT was at | 164.5 crore (down 45.4% YoY) What should investors do? Alembic's share price has grown by ~1.7x over the past five years (from ~| 573 in June 2016 to ~| 984 levels in June 2021)....

ALPM reported a 42% YoY decline in Q1 EBITDA due to weak US sales led by increased competition in key molecules and launch delays

Gross margin contracted by 390bp YoY to 71% in 1QFY22 due to increased competition in certain products. EBITDA margin contracted at a higher rate of 1,260bp YoY to 17.8% (est. 25.4%) due to higher operational cost (other...

We maintain BUY on Alembic Pharmaceuticals Ltd (ALPM') and increase our March FY22 TP to INR 1,480 (from INR 1,475 on modeling changes) thus an upside of 47% over the CMP. Q4FY21 results were on expected lines. Subdued US performance was on the back of headwinds coming from Sartans pricing erosion, which is likely to continue in the medium term. RoW business was a pleasant surprise on the back of low base post serialisation. Domestic continues to underperform due to Covid related headwinds; Specialty to lead the FY22 growth. Key medium term trigger would be USFDA's EIR for the general injectable plant which has already been audited by the USFDA on Feb-2021, deemed mission critical. Using DCF, we value Umbralisib at INR 160 per share discounting these sources of revenues including milestone based payments and CMP revenues over Umbralisibs commercial life. ALPM is currently trading at ~12x / ~9.6x EV / EBITDAx for FY22E / FY23E....