Neutral Alembic Pharma; target of Rs 960: Motilal Oswal

Motilal Oswal recommended accumulate rating on Alembic Pharma with a target price of Rs 960 in its research report dated May 09, 2024.

Broker Research

May 14, 2024 / 12:12 IST

Neutral

26 Aug, 2025 12:21

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Motilal Oswal's research report on Alembic Pharma

Alembic Pharma (ALPM) delivered better-than-expected 4QFY24 earnings, led by better gross margin and improved off-take in the API segment. After two consecutive years of weak financial performance, ALPM ended FY24 with 10%/14%/43% YoY growth in sales/EBIDTA/PAT to INR62b/INR9.3b/ INR6b.

Outlook

We slightly raise our earnings estimates by 3%/2% for FY25/FY26, factoring in a healthy pace of launches in the US generics segment and robust execution in the animal health segment, partially offset by higher R&D spending. We value ALPM at 23x 12M forward earnings to arrive at TP of INR 960. We expect a 13% earnings CAGR over FY24-26, led by a 10% sales CAGR in both DF/US segments and improved operating leverage (160bp margin expansion over FY24-26). ALPM continues to build its product pipeline for injectables, ophthalmics and inhalation segments for the US market with a sound compliance track record. The company focuses on improving MR productivity in the DF segment. We believe the current valuation adequately factors in the upside in earnings. Hence, we maintain our Neutral rating on the stock.

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