Alembic Pharmaceuticals Ltd. share price target

Maintain NEUTRAL with a TP of Rs 610 (18x SEP20E EPS). Alembic Pharma (ALPM) reported buoyant numbers with revenue at Rs 11.3bn (+43% YoY), EBITDA margin at 26.8% (+413bps YoY) and PAT jumping to Rs 2bn (+65% YoY) in 2QFY19. This was largely driven by one-off Valsartan opportunity in the US market during this quarter. Adjusting for Valsartan, we believe revenues were up 16-18% YoY with Ex-US international business growing ~114% YoY and EBITDA margin was at 17-18%, affected by increased SG&A; cost and heightened R&D; in 2QFY19.

ICICI Securities Ltd | Retail Equity Research Alembic Pharma's Q2FY19 results were way above expectations on all front mainly due to one-off Valsartan (cardiovascular) opportunity in the US and 133% growth in the ex-US business to | 168 crore. This new ex-US base is likely to be sustainable, as per the management. Even ex one-off, US business grew 20%+ led by volume growth and price hike in select products Domestic formulations were flat owing to high base of re-stocking...

22 October 2018 2QFY19, primarily led by US business. Gross margin expanded 290bp YoY (+550bp QoQ) on account of a superior product mix. EBITDA margin expanded ~410bp YoY to 26.8%, primarily due to a higher gross margin and lower employee expenses (-400bp as % of sales), partially offset by higher INR1.6b), mainly led by strong revenue growth and margin expansion. Interest expense stood at INR58m v/s INR4m in the year-ago period. PAT sales/EBITDA/PAT grew 38%/62%/54% YoY to INR19.9b/ INR4.5b/INR2.9b. We expect 2HFY19 to be relatively soft as the base effect comes into play. International sales (52% of overall sales) grew robustly by ~124% YoY to INR5.9b, led by both non-US (+133% YoY) and US (+121% YoY, led one-time sales of Valsartan due to shortage) segments. API business grew ~9% YoY to INR1.6b.

Alembic Pharma's (Alembic) Q1FY19 results were below our expectation. Though, Revenue were in-line with our estimates (driven by strong growth in India (up 40.1% YoY) and Non-US (up 78.7% YoY), EBITDA margin slipped from 20.3% in Q4FY18 to 17.5% in the Q1FY19 given the increased expenses. EBITDA at Rs1.5bn was up 48.8% YoY however, down 12.8% QoQ. PAT was at Rs905mn (up 35.6% YoY; 27.1% below our est). Given higher operating costs post commissioning of new facilities, we have revised...

ICICI Securities Ltd | Retail Equity Research Revenues grew 33% YoY to | 863 crore (I-direct estimate: | 817 crore) on account of 40% YoY growth in domestic formulations to | 331 crore (I-direct estimate: | 327 crore), up 79% YoY in international (ex-US) business to | 126 crore (I-direct estimate: | 69 crore) and 38.5% YoY growth in API segment to | 180 crore EBITDA margins improved 186 bps YoY to 17.5% but came in lowerthan I-direct estimate of 20.0% mainly due higher other expenditure. EBITDA grew 48.8% YoY to | 151 crore...

Margins Falter despite strong revenue growth: In Q1FY19, total revenues of Alembic Pharma increased by 33% YoY to Rs 8.6 bn (above our estimates Rs 8.0 bn). The Company's operating marginsincreased from 15.7% to 17.5% YoY (our estimates 20%).

Maintain NEUTRAL with a TP of Rs 560 (18x FY20E EPS). Alembic Pharma (ALPM) reported better numbers in their 1QFY19 result with revenue at Rs 8.6bn, up 34.6%YoY on account of a favourable low base. US revenues declined sequentially even after adjusting for one-off payment received in 4QFY18. Gross margin at 70.4% increased 130bpsQoQ due to a seasonally strong quarter.

28 July 2018 ALPMs 1QFY19 revenue increased significantly by ~33% YoY to INR8.6b (in-line), primarily driven by the non-US international and domestic businesses. Gross margin shrank 154bp YoY due to a change in product mix. However, EBITDA margin improved ~190bp YoY to 17.5% (est. of 20.9%), led by a decline in employee expense by ~530bp (as % of sales). This, however, was somewhat offset by higher other expense (+190bp). EBITDA grew ~49% YoY to INR1.5b (est. Higher depreciation and tax rate led to PAT growth of ~36% YoY to INR905m (below est.

In Q4FY18, total revenues of Alembic Pharma increased by 15% YoY to Rs8.5 bn (above our estimates Rs. 8.2 bn). The Company's operating marginsincreased from 18.2% to 20.3% YoY (our estimates 22%).

Maintain NEUTRAL with a revised TP of Rs 535 (18x FY20E EPS). Alembic Pharmas (ALPM) revenue grew 16%YoY to Rs 8.5bn, led by one off payment from the US marketing partner to the tune of US$ 5-6mn and higher volumes in rest of the US portfolio in 4QFY18. Although EBITDA grew 29% YoY to Rs 1.7bn, it declined 8% QoQ, largely driven by lower gross margin and higher R&D; spend (14% of sales). Reported PAT remained flat YoY at Rs 938mn with relatively higher tax rate in 4QFY18.