Alembic Pharmaceuticals Ltd. share price target

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.

Consecutive beat we raise FY21/FY22 EPS by 11-17%

Alembic Pharma (ALPM) reported a 31% EBITDA beat in Q4.

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....

In Q3FY20, total revenues of Alembic Pharma increased by 18.7percent YoY toRs. 12.1 bn.

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.

ALPM: Entering into new multi-year earnings cycle initiate with BUY; Weekly Eco Wrap: Spotlight on Fed and ECB