Hold Alembic Pharma: target of Rs 925: ICICI Securities

Hold

ICICI Securities's research report on Alembic Pharma

Alembic Pharma’s (Alembic) Q3FY25 result was dragged by tepid performance in India and API biz. India biz growth has been weaker (5.8% in 9MFY25) for the last couple of quarters due to pressure in acute segment even though animal health biz has been growing <20%. It is launching new products across therapies which should boost growth in human formulations biz, while traction in animal health segment will be maintained. US sales rose 8.6% YoY to USD 62mn, boosted by new launches. In Q4, it will further launch 5 products which may ensure that the momentum is US biz is unhurt. Fall in API biz could be arrested and other international market may continue to grow faster ahead. Cut FY25/26E EPS by ~9–14% on slower recovery in India. Maintain HOLD with lower TP of INR 925, on 24x FY26E EPS.

Outlook

We expect revenue/EBITDA/PAT CAGR of 8.7%/14.6%/15.1% for FY24–27E, respectively. The stock currently trades at 22.7x FY26E and 18.4x FY27E earnings, and EV/EBITDA multiples of 13.9x FY26E and 11.7x FY27E. We retain HOLD but lower target price to INR 925 (from INR 1,125), based on 24x FY26E EPS (earlier 25x FY26E EPS).

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