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Buy Alembic, target of Rs 60: Karvy
Karvy Stock Broking has maintained its buy rating on Alembic with a target price of Rs 60. Revenues for the quarter have moved up by 33 % to Rs 2293 million.
Karvy Stock Broking has maintained its buy rating on Alembic with a target price of Rs 60 in its August 5, 2008 research report. "Revenues for the quarter have moved up by 33 % to Rs 2293 million. Domestic formulations have degrown by 20 % on account of extensive restructuring in the domestic formulations space. Exports formulations as a segment has grown by 92 % to Rs 238 million while API exports to non regulated markets has grown by 100 % to Rs 165 million while exports to regulated markets has grown from Rs 87 million to Rs 708 million."
"We have reduced our formulations exports business to a growth of 7 % and 20 % in FY 2009 and FY2010 and domestic formulations to a growth of 12 % for FY 2009E and FY2010E. We however upgrade our export API revenues from 15 % growth to 23 % growth in FY 2009. We have assumed that the company would be able recover lost ground in the domestic formulations space in the ensuing quarters. In our revenue model, we have written off amortization charges of Rs 159 million for FY 2009 and FY 2010 for the company. We believe the higher R & D impact on margins would get evened out in Q3 FY 2009 as the impact came in the Q3 FY 2008. We maintain our earnings forecasts and maintain our BUY on the stock with a price target of Rs 60 based on 8x FY 2010E (EPS Rs 7.5)," says Karvy's research report.
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