Neutral Alembic Pharma; target of Rs 970: 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 (ALPM) delivered operationally in-line 3QFY25 performance. Higher interest outgo and tax led to lower-than-expected earnings for the quarter. The US business has witnessed an uptick to USD63m (up 10%/12% YoY/QoQ) for the quarter on the back of new launches and steady market share gain. The India business exhibited muted YoY growth due to the adverse performance of acute therapies. We cut our earnings estimate by 13%/5%/4% for FY25/FY26/FY27 to factor in: 1) weakness in the acute segment of domestic formulations (DF), 2) reduced operating leverage, and 3) higher interest outgo. We value ALPM at 24x 12M forward earnings to arrive at our TP of INR970.

Outlook

We factor in a 28% earnings CAGR over FY25-27. We reiterate our Neutral rating on the stock due to the limited upside from current levels.

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Alembic Pharma_04022025_Motilal Oswal