Angel Broking neutral on Alembic Pharma

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Angel Broking`s research report on Alembic Pharmaceuticals

“For 4QFY2014, Alembic Pharmaceuticals (Alembic) delivered numbers much ahead of our estimates on the OPM front; however, the net profit came in below expectations. The net sales came in at Rs463cr V/s an expected Rs492cr, registering a yoy growth of 23.4 percent. The company's OPM came in at 19.6 percent V/s 18.7 percent expected, posting an expansion of 248bp yoy, which led the company to post a net profit growth of 40.4 percent yoy to Rs61cr V/s our expectation of Rs69.9cr. We maintain our Neutral rating on the stock.”

“For 4QFY2014, Alembic delivered numbers much above our expectations on the OPM front. Net sales came in at Rs463cr V/s an expected Rs492cr, registering a yoy growth of 23.4 percent. The growth was driven by exports, which rose 58.6 percent yoy. Domestic sales on the other hand stood at Rs199.5cr V/s Rs175.3cr in the corresponding quarter of last year, registering a yoy growth (with domestic formulation growth) of 14 percent. The company's OPM came in at 19.6 percent V/s an expected 18.7 percent, posting an expansion of 248bp yoy, which led the company to post a net profit growth of 40.4 percent yoy to Rs61cr V/s our expectation of Rs69.9cr.”

“Alembic’s growth and profitability profile has improved post the restructuring carried out by the Management. Over FY2014-16, we expect the company to post a CAGR of 16.1 percent and 14.6 percent in sales and net profit respectively. We recommend a Neutral rating on the stock,” says Angel Broking research report.    

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