Hold Alembic Pharma: target of Rs 900: ICICI Securities

ICICI Securities's research report on Alembic Pharma

Alembic Pharma’s (Alembic) Q1FY26 result was in line with our expectations. Revenue growth was mainly driven by US (13% YoY) and ex-US international business (21% YoY). India growth was tepid at 4.7% YoY due to challenges in specialty portfolio (up 1% YoY) and slowdown in acute market. Gross margin expansion of 142bps YoY was supported by better mix and cost efficiencies. In FY26, US biz of Alembic is likely to grow at 10-15% backed by 15 launches while it is working towards reviving double-digit growth in India. R&D cost is likely to be INR 6–6.5bn in FY26, to be spent towards development of peptides and other complex products. Cut FY26/27E EPS by ~4% to factor in higher depreciation. Maintain HOLD with higher TP of INR 900, based on 22x FY27E EPS.

Outlook

We retain HOLD with a higher target price of INR 900 (from INR 885), based on 22x FY27E EPS (earlier 21x FY26E EPS).