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Motilal Oswal Report
Alembic Pharmaceuticals Ltd. delivered record revenue/Ebitda/profit after tax for Q1 FY21 on the back of strong performance in export formulations/active pharmaceutical ingredient (API) and partly due to lower research and development (R&D) spend for the quarter.
Alembic Pharma remains on track in terms of completing capex, with approximately Rs 15 billion spent over FY16–20 and a similar amount expensed for R&D. We expect the meaningful benefit to be reflected from H2 FY22. Covid-19-led drag on domestic formulations growth.
We raise our earning per share estimate by 20%/19.4% for FY21/FY22 to factor new launches in U.S. Generics and a favorable outlook for Non-US Formulations/API sales. Accordingly, we revise our price target to Rs 1,100 (from Rs 975 earlier), valuing the stock on a 20 times 12 month forward earnings basis. We maintain Neutral stance on limited upside from current levels.
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