Neutral Alembic Pharma; target of Rs 1110: Motilal Oswal

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26 Aug, 2025 12:21

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Motilal Oswal's research report on Alembic Pharma

Alembic Pharma’s (ALPM) 2QFY25 results came in below our estimates due to the deterioration in API business and higher operational costs. Weak seasonality impacted acute category of its domestic formulation (DF) business, which affected the overall 2Q performance. We cut our earnings estimates by 15%/8%/5% for FY25/FY26/FY27 to factor in a) the loss of some customers in API business, b) muted demand in acute therapies, c) slower execution in specialty DF segment, and d) higher operational costs. We value ALPM at 25x 12M forward earnings to arrive at a TP of INR1,110.

Outlook

We cut our earnings estimates by 15%/8%/5% for FY25/FY26/FY27 to factor in a) the loss of some customers in API business, b) muted demand in acute therapies, c) slower execution in specialty DF segment, and d) higher operational costs. We value ALPM at 25x 12M forward earnings to arrive at a TP of INR1,110.

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